2023 (11) TMI 768 - HC - GST

Condonation of delay in filing appeal before the first appellate authority - delay on medical grounds - reasonable cause - Violation of principles of natural justice - validity of assessment order - HELD THAT - On perusal of the record, it is observed that the adjudicating authority passed impugned order on 13.04.2022. The order was served on Mr. V. Dhanesh on the very same day. The petitioner ought to have filed the Appeal by 12.07.2022, but the petitioner filed the appeal on 01.11.2022, with a delay of 112 days. As per clause (4) of Section 107 of the Act, the period of one month of delay in filing the appeal, can be condoned, for any sufficient reasons. After deducting the period of one month, which is a condonable period as per the Act, still the delay of 81 days in preferring the appeal is visible from the record. Respondent No. 2 passed order impugned, rejecting the appeal at the admission stage, on the point that the appeal has been filed with a delay beyond the condonable period of limitation. The medical certificate of Mr. V. Dhanesh is placed on record. No contrary material is filed, refuting the contents of the medical certificate. Indeed, the right of appeal of a party is creature of statute and since, it is a statutory remedy. The right of appeal under Section 107 of the Act is also subject to certain conditions. It is not in dispute that, the 2nd respondent has no authority to admit the appeal, when it is filed beyond the condonable period of one month of limitation as per the statute. The petitioner herein expressed her difficulty in filing the appeal within the time, since she has no knowledge about service of adjudication order on the accountant viz., Mr. Dhanesh. This writ petition is allowed and the impugned order dated 07.01.2023 passed by the 2nd respondent rejecting the appeal filed by the petitioner on the ground that the same was filed beyond the condonable period is set aside and consequently, the delay of 112 days in filing the appeal is condoned subject to the petitioner depositing 20% of the disputed tax in addition to the amount if any already deposited at the time of filing the appeal and paying costs of ₹10,000/- with the High Court Legal Services Committee within six weeks from the date of receipt of copy of the order, upon which, the 2nd respondent shall admit the appeal filed by the petitioner and after affording an opportunity of hearing to both parties, dispose of the appeal in accordance with the governing law and rules expeditiously. Petition allowed.

Summary

Issues involved:
The issues involved in this case are the legality of the adjudication order passed by the 1st respondent and the rejection of the appeal by the 2nd respondent on the grounds of being filed beyond the condonable period of limitation.

Adjudication Order by 1st Respondent:
The petitioner, a firm engaged in works contracts and supply of goods under the GST Act, challenged the adjudication order dated 13.04.2022, passed by the 1st respondent, alleging it to be illegal, arbitrary, and in violation of principles of natural justice and the GST Act. The petitioner contended that due to the absence of their accountant, they were unaware of the order passed against them. Despite expressing willingness to submit necessary details, the petitioner faced challenges due to the Covid pandemic. The petitioner's appeal to the 2nd respondent was rejected on the grounds of being filed beyond the condonable period of limitation.

Appeal Rejection by 2nd Respondent:
The 2nd respondent rejected the petitioner's appeal challenging the adjudication order, citing that it was filed 81 days beyond the condonable period of limitation of three months as per Section 107 of the Act. The petitioner argued that the delay was due to the accountant's absence caused by Covid and requested the appeal to be admitted, emphasizing the significant disputed tax amount of Rs. 6,54,67,099/-. The 2nd respondent maintained that the appeal was rightly rejected for being time-barred.

Court's Decision:
After considering the arguments, the Court acknowledged the petitioner's difficulty in filing the appeal within the prescribed period due to the accountant's absence during the pandemic. Citing statutory limitations, the Court noted that the right of appeal is subject to certain conditions and cannot be allowed to expire automatically. Therefore, the Court set aside the 2nd respondent's order rejecting the appeal, condoning the delay of 112 days on the condition that the petitioner deposits 20% of the disputed tax and pays costs within six weeks. The 2nd respondent was directed to admit the appeal and dispose of it expeditiously after a hearing.