Madras HC directs Department to hear appeal on merits filed beyond condonable period

The Hon'ble Madras High Court, in the case of M/s Sri Shanmuga Motors v. State Tax Officer [Writ Petition No. 11737 of 2024 dated June 03, 2024] had set aside the Appellate Order and directed the Department to hear the appeal on merits which has been filed beyond the condonable period for filing of appeal without going into the question of limitation.

Facts:

M/s Sri Shanmuga Motors ("the Petitioner") filed appeal against Assessment Order dated September 09, 2023 passed by the State Revenue Department ("the Respondent"). Thereafter, the Petitioner filed an appeal before the Respondent Authorities; However, the appeal was rejected by the Appellate Authority vide order dated January 30, 2024 ("the Impugned Appellate Order"). The rejection was based on the ground that the appeal was filed beyond the condonable period prescribed under Section 107(4) of the Central Goods and Services Tax Act, 2017 ("the CGST Act").

Issue:

Whether the Appellate Authority is empowered to hear appeal on merits without going into the question of limitation?

Held:

The Hon'ble Madras High Court in the case of Writ Petition No. 11737 of 2024 held as under:

• Noted that, the Petitioner had asserted in the affidavit that the tax liability was imposed despite the ingredients necessary for invoking Section 74 of the CGST Act were not satisfied.
• Held that, the Impugned Appellate Order is set aside as the period of delay beyond the condonable period is only 21 days and directed the Respondent to receive and dispose of the appeal without going into the question of limitation.

Our Comments:

In a Pari Materia case of M/s Tvl.Sri Sai Traders v. Deputy Commissioner (ST), Goods and Services Tax Appeals [Writ Petition No. 12860 of 2024 dated June 07, 2024] the Hon'ble Madras High Court set aside the order rejecting the appeal which was 29 days beyond the three-month limitation and directed the Appellate Authority to consider the appeal on the merits without considering the limitation issue.

The Hon'ble Calcutta High Court in the case of Jayanta Ghosh and Ors. v. State of W.B. [W.P.A No. 230 of 2024 dated March 05, 2024] and Murtaza B Kaukawala v. State Of W.B. And Ors. [MAT/1361/2023 dated October 18, 2023], by invoking Section 5 of the Limitation Act, allowed the appeal filed beyond the limitation period interlalia holding that an Appellate Authority cannot dismiss the appeal on the ground of limitation without granting any opportunity of hearing. The delay can be condoned if the principles of natural justice has been violated by not providing the opportunity of hearing to the Appellant and the period prescribed for filing of appeal is not final.

However, The Hon'ble Kerala High Court in M/s Penuel Nexus Pvt Ltd. v. The Additional Commissioner (Appeals), Cochin [WP(C) No. 15574 of 2023 dated June 13, 2023] held that the Additional Commissioner is right in rejecting the time-barred appeal as section 107 of the CGST Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act, 1963.

Further, The Hon'ble Allahabad High Court in the case of M/s. Yadav Steels v. Additional Commissioner and Anr. [Writ Tax No. 975 of 2023 dated February 15, 2024], dismissed the writ petition, thereby holding that, Section 5 of the Limitation Act would not be applicable for appeal filed under Section 107 of the UPGST Act.

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED