Introduction- Section 107(1) of the CGST Act, 2017 provides that any person aggrieved with the order of the Adjudicating Authority can file an appeal against such order before the Appellate Authority. The said provisions also provide that such appeal shall be filed within a period of three months from the date on which the order is communicated to such person.
“Section 107. Appeals to Appellate Authority. — (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.”
Additionally, Section 107(4) of the CGST Act, 2017 empowers the Appellate Authority to condone the delay in filing of Appeal by the aggrieved person. However, the Appellate Authority can condone such delay only if sufficient cause is shown and the delay is not beyond the period of one month from the actual due date.
In the recent times, due to Covid 19 situation, we have seen various announcements from the Central Government giving relaxation to the taxpayers for various compliances under the GST laws. Further, the Supreme Court has also issued an order dated 23rd March 2020 declaring that the period from 15th March 2020 till further orders, shall not be taken into consideration for counting the period of limitation prescribed under any general or special laws.
We will analyze the anomaly between the relaxation provided by the Central Government and the order of the Supreme Court vis-à-vis filing of an appeal under the GST law.
Relaxation by the Central Government
With the announcement of countrywide lockdown, the Hon’ble Finance Minister announced several relaxations for the taxpayers under the Direct Tax and Indirect Tax Laws. The Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 came into effect on 31st March 2020. The Ordinance inserted Section 168A to the CGST Act, 2017.
“Section 168A. Power of the Central Government to extend the time limit in special circumstances – (1) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, by notification, extend the time limit specified in, or prescribed or notified under, this Act in respect of actions which cannot be completed or complied with due to force majeure.
(2) The power to issue notification under sub-section (1) shall include the power to give retrospective effect to such notification from a date not earlier than the date of commencement of this Act.
Explanation.- For the purposes of this section, the expression “force majeure” means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of this Act.”
Section 168A empowers the Central Government to extend the time limit specified/ prescribed under the CGST Act, 2017, in respect of actions which cannot be completed or complied due to Force Majeure. The explanation to Section 168A defines the term ‘Force Majeure’ and enlists several calamities including, ‘epidemic’, which can affect the implementation of any provision of the Act.
The Central Government, exercising its power under Section 168A of the CGST Act, 2017, vide Notification No. 35/2020-CT dated 03.04.2020, granted general extension for compliance under the CGST Act, 2017, IGST Act, 2017 and UTGST Act, 2017. The said notification has extended the due date for the compliances which were due between 20th March 2020 to 29th June 2020, till 30th June 2020, subject to certain exceptions.
The above extension has been made applicable to appeals which were due to be filed between 20th March, 2020 to 29th June 2020.
Order of the Supreme Court
The Hon’ble Supreme Court, on 23rd March 2020, took suo motu cognizance of the Covid 19 situation and ordered that a period of limitation in filing petitions/applications/suits/ appeals/all other proceedings, irrespective of the limitation prescribed under the general law or special laws, whether condonable or not, shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings. The order of the Supreme Court reads as under:
“This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 Virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State).
To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings.
We are exercising this power under Article 142 read with Article 141 of the Constitution of India and declare that this order is a binding order within the meaning of Article 141 on all Courts/Tribunals and authorities.”
There can be two possible interpretations of the above order:
1. Extension of time limit: The Hon’ble Supreme Court has used the term ‘shall stand extended’ which means that in cases where the limitation period for filing an appeal expires on or after 15th March 2020, then in such cases, the due date for filing an appeal shall stand extended till further order/s of the Hon’ble Supreme Court.
However, such interpretation will not serve the purpose of the order, as the litigants will be rushing to the courts as soon as the due date of filing is declared by the Hon’ble Supreme Court and if such date coincides with the last date of lockdown, the litigants will not get proper time to prepare their petitions/ appeals/ application or any other document, as the case may be.
2. Halt on limitation period: The order of the Hon’ble Supreme Court can be understood as if the Court has ordered a halt on the ticking of limitation clock w.e.f. 15th March 2020. In other words, the Hon’ble Supreme Court has intended to exclude the period from 15th March 2020 till such date as may be declared by the Hon’ble Supreme Court in its future order.
Such interpretation is inconsonance with the intention of the Supreme Court as it excludes the period of lockdown at the time of counting the limitation period prescribed under any general or special law.
The Hon’ble Supreme Court exercised its powers under Article 142 read with Article 141 of the Constitution of the India and made its order binding on all the Courts, Tribunals and authorities.
Anomaly between the Government Relaxation and Order of the Supreme Court
The anomaly between the relaxation provided by the Central Government and the order of the Hon’ble Supreme Court can be understood by referring to the below table:
|Situation||Date of Order||Due date of filing of Appeal u/s 107||Due date of filing including Condonable Period of 1 month||Due date as per Notification No. 35/2020-CT dated 03.04.2020|
|I||18.11.2019||17.02.2020||16.03.2020||No relief, as due date is prior to 20.03.2020|
|II||16.02.2020||15.05.2020||24.06.2020||30.06.2020, as the due date falls between 20.03.2020 and 29.06.2020|
In such cases, the Notification No. 35/2020-CT dated 03.04.2020 is of no help for the aggrieved persons. However, the order dated 23rd March 2020 of the Hon’ble Supreme Court can be of certain help as it provides that the limitation period with respect to any appeal/ application stands extended w.e.f. 15th March 2020. Thus, the aggrieved person can argue that though the relief under Notification No. 35/2020-CT dated 03.04.2020 is not applicable upon such cases but the order of the Hon’ble Supreme Court is issued under Article 142 read with Article 141 of the Constitution and is considered as law of the land and will prevail over any other law for the time being in force.
In such cases, the Notification No. 35/2020-CT dated 03.04.2020 has extended the due date for filing of appeal till 30th June 2020. But considering the second interpretation of the order of the Hon’ble Supreme Court, one can argue that the period starting from 15th March 2020 till such date, as may be declared by the Hon’ble Court, shall be excluded for the purpose of counting the limitation period.
For examples, the Supreme Court declares 15th June 2020 as the last date for period to be excluded from limitation period. In Situation II, adopting second interpretation of the order, the period from 15th March 2020 to 15th June 2020 i.e., 2 months stands excluded while calculating the limitation period. Thus, the limitation period for aggrieved persons in Situation II, starts running again from 16th June 2020 and such person will have additional two months to file an appeal under Section 107 of the CGST Act, 2017.
However, in accordance with Notification No. 35/2020-CT dated 03.04.2020, such person is required to file the appeal by 30th June 2020.
The abovementioned scenarios are just to illustrate the anomaly between the relaxation provided by the Central Government and the order of the Hon’ble Supreme Court. There will be more of such situations which, if not clarified immediately, will open the pandora box of litigation between the taxpayers and Government.
A clarification on such anomalies is required before the taxpayers and the Government find themselves trapped into it. This will save the cost of litigation for the taxpayers as well as the Central Government.
Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion, advice or any advertisement. This document is not intended to address the circumstances of any particular individual or corporate body. Readers should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a particular situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein.