2023 (8) TMI 577 - HC - GST

Rejection of appeal on the ground of time limitation - sufficient cause for delay or not - petitioner was prevented by sufficient cause from presenting the appeal within the statutory period of limitation or not - HELD THAT - The word sufficient cause as appearing in Section 107(4) of CGST Act, 2017 for the purpose of seeking condonation of delay in filing the appeal before the Commissioner (Appeal) has been interpreted by the Hon ble Apex Court in the light of Section 5 of Limitation Act relating to Land Acquisition Matter would guide the Court in deciding the point. In COLLECTOR, LAND ACQUISITION VERSUS MST. KATIJI AND OTHERS 1987 (2) TMI 61 - SUPREME COURT where it was held that Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. While considering the application for condonation of delay, it is not the length of the delay, but cause for delay which would be paramount consideration. If the cause shown as indicated under Section 107(4) of the act, such delay deserves to be condoned irrespective of the length of the delay. It does not mean that the learned Commissioner (Appeals) can condone the delay beyond the condonable period that is one month after expiry of three months after statutory period of three months. As seen from the order impugned, the learned Commissioner opined that the reasons are not convincing. Pertinent to say that, the learned Commissioner never denied about freezing of bank account of the petitioner and about issuing of notices to the purchasers who are yet to pay consideration to the petitioner - In this context it is necessary to refer Section 107 (6) which is vivid on the point of deposit of 10% of the disputed tax which is mandatory at the time of filing of the appeal. When the bank account of the petitioner is freezed by the authorities, it is a relevant fact to consider the delay since the pre-deposit of 10% disputed tax at the time of filing of the appeal is mandatory. The view taken by the learned Commissioner appears to be forcing the horse to run after tying the legs. The right of appeal which is created under statute is a substantive right of the party that cannot be denied by taking pedantic view. The impugned order passed by respondent No. 2 dated 03.06.2023 is set aside - petition allowed.

Summary

Issues:
The judgment involves the rejection of an appeal by the Appellate Authority under the A.P. G.S.T Act, 2017, based on delay in filing and the subsequent challenge to this rejection.

Details of the Judgment:

Issue 1: Appeal Rejection and Delay in Filing
The petitioner, a registered dealer engaged in the business of iron scrap, challenged an order ascertaining a taxable amount. The Appellate Authority rejected the appeal due to a delay of 25 days in filing, despite the petitioner's accounts being frozen, causing financial constraints. The petitioner argued that the delay was justified due to the financial crisis and freezing of accounts, hindering the mandatory pre-deposit requirement for filing the appeal.

Issue 2: Condonation of Delay
The Court analyzed Section 107 of the CGST Act, 2017, which allows for the condonation of delay if the appellant was prevented by sufficient cause. Referring to legal precedents, the Court emphasized a "justice-oriented approach" in interpreting "sufficient cause" and highlighted the importance of considering the reasons behind the delay rather than a strict timeline.

Issue 3: Legal Interpretations
The Court cited legal principles that guide the condonation of delay, emphasizing the importance of substantial justice over technicalities. It noted that the Commissioner (Appeals) cannot exceed the permissible period for condonation as specified in the statute, and strict interpretation of fiscal statutes is required.

Conclusion:
Ultimately, the Court found the reasons for the delay provided by the petitioner to be valid, considering the financial crisis and frozen accounts. The rejection of the appeal by the Appellate Authority was deemed unjustified, and the impugned order was set aside. The Court directed the Appellate Authority to restore the appeal and proceed with the matter according to law, ruling in favor of the petitioner.