2024 (8) TMI 384 - HC - GST

Challenge to order dismissing appeal as barred by limitation - section 107 of CGST Act 2017 and the Circular No. 148/04/2021-GST dated 18th May 2021 - HELD THAT - The legislative intentment in this regard is manifest in the provisions under Section 30 of the CGST Act. In the backdrop of such legislative intentment the provisions under Section 107 of the CGST Act cannot be frustrated on mere technicalities. A right to appeal as provided under the statute must be decided on merits irrespective of some laches or delay on the part of the Assessee. This is by now too well-settled that the statutory provisions of limitation under Section 107 of the CGST Act would bind the statutory authority which cannot condone the delay except the circumstances envisaged thereunder but such limitations are not applied in a writ proceeding. The powers under Article 226 of the Constitution of India are founded on justice equity and good conscience and are exercised for public good. This Court referred to the decision in ASSISTANT COMMISSIONER (CT) LTU KAKINADA ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED 2020 (5) TMI 149 - SUPREME COURT wherein the Hon ble Supreme Court observed that if the Assessee did not avail the alternative remedy of statutory appeal even within the extended period of limitation by seeking condonation of delay then a writ petition shall not be entertained. The present writ petition is entertained and the order dated 13th June 2024 passed by the Joint Commissioner of CGST is quashed - petition allowed.

ISSUES PRESENTED and CONSIDERED

The primary issue considered in this judgment was whether the appellate authority under the Central Goods and Services Tax Act, 2017 (CGST Act) could entertain an appeal filed beyond the statutory period prescribed under Section 107 of the CGST Act. The secondary issue was whether the High Court could exercise its powers under Article 226 of the Constitution of India to condone the delay and entertain the appeal despite the statutory limitations.

ISSUE-WISE DETAILED ANALYSIS

1. Legal Framework and Precedents

The relevant legal framework is provided by Section 107 of the CGST Act, which prescribes a time limit for filing appeals. According to this section, an appeal must be filed within three months from the date of communication of the decision or order. The appellate authority may condone a delay of an additional one month if sufficient cause is shown. The Joint Commissioner of CGST referred to a precedent from the Kerala High Court, which established that statutory authorities created by the CGST Act do not have the jurisdiction to condone delays beyond the periods explicitly provided in the statute. The court also referenced the decision in "Plenuel Nexus Private Ltd. Vs. Additional Commissioner Headquarter," which reinforced the exclusion of Section 5 of the Limitation Act from the CGST framework.

2. Court's Interpretation and Reasoning

The Court noted that the CGST Act is a special statute and self-contained code, and it impliedly excludes the application of the Limitation Act. The provisions of fiscal statutes are to be strictly construed, and the appellate authority has no power to entertain an appeal filed beyond the prescribed period. However, the Court also recognized the broader powers under Article 226 of the Constitution, which are based on principles of justice, equity, and good conscience. These powers allow the High Court to intervene in cases where statutory limitations might lead to an unjust outcome.

3. Key Evidence and Findings

The Joint Commissioner of CGST dismissed the appeal as time-barred, strictly adhering to the statutory limits under Section 107 of the CGST Act. The Court found that although the statutory authority was correct in its interpretation of the law, the broader context of justice and fairness warranted judicial intervention. The Court also considered the precedent set in "Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs. Glaxo Smith Kline Consumer Health Care Limited," which highlighted the Court's ability to condone delays in certain circumstances.

4. Application of Law to Facts

The Court applied the principles of statutory interpretation to affirm that the Joint Commissioner acted within the legal framework by dismissing the appeal as time-barred. However, the Court balanced this with its constitutional powers to ensure justice, deciding to entertain the writ petition and quash the order of the Joint Commissioner. The decision was contingent upon the petitioner fulfilling certain conditions, such as depositing late fees and penalties.

5. Treatment of Competing Arguments

The Court addressed the argument presented by the Revenue, which cited a previous decision to assert that the writ petition was not maintainable due to the express bar of limitation under Section 107. The Court distinguished the current case from the cited precedent by emphasizing the unique circumstances and the broader constitutional powers available to it, which justified intervention.

6. Conclusions

The Court concluded that while the statutory framework under the CGST Act is clear in its limitations, the High Court's constitutional powers allow it to intervene in the interest of justice. The writ petition was allowed, and the order of the Joint Commissioner was quashed, subject to the petitioner meeting specific conditions.

SIGNIFICANT HOLDINGS

The Court held that the CGST Act, as a special statute, strictly limits the appellate authority's power to condone delays. However, the High Court, exercising its constitutional powers, can intervene to ensure justice. The Court stated, "The Central Goods and Services Tax Act is a special statute and a self-contained code by itself... it is trite, that the Limitation Act will apply only if it is extended to the special statute." This establishes the principle that while statutory limitations bind authorities, the High Court retains the power to address potential injustices arising from rigid adherence to such limitations.

Ultimately, the Court determined that the writ petition was maintainable and quashed the Joint Commissioner's order, restoring the appeal subject to the fulfillment of certain conditions by the petitioner. This decision underscores the Court's role in balancing statutory requirements with equitable considerations to achieve fair outcomes.

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