2025 (1) TMI 979 - HC - GST

Challenge to assessments made for the assessment years 2017-18 and 2018-19 respectively - discrepancy in GSTR-1 monthly sales return and GSTR-3B monthly returns comprising of the sales input tax and the output tax payable - HELD THAT - The Central Board of Indirect Taxes and Customs came out with Notification No. 53 of 2023 Central Tax at Annexure-P/3 which provided for a window of filing an appeal with respect to orders which were passed prior to 31.03.2023. The time provided was up to 31.01.2024 and there was an additional condition that admitted tax plus 12.5% of the amounts in demand shall be paid through the Electronic Cash Ledger. The petitioner filed an appeal on 20.01.2024 and complied with the condition of payment of admitted tax and deposit of 12.5% also. However the petitioner s appeal stood dismissed as per Annexure-P/1 on the finding that the assessment order was dated on 23.06.2023 after 31.03.2023. It is deemed appropriate to direct the Appellate Authority to consider the appeal on merits. To facilitate the same the Annexure- P/1 issued for the year 2017-18 is set aside and the Appellate Authority is directed to resume the appeal to its files and dispose it off on merits. Petition allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the petitioner's appeal against the assessment orders for the years 2017-18 and 2018-19 was improperly dismissed due to the application of Notification No. 53 of 2023, which set a cut-off date of 31.03.2023 for appeals.
Whether the petitioner is entitled to have their appeal considered on merits despite the assessment order being dated after the cut-off date specified in the notification.
What is the rationale behind the cut-off date of 31.03.2023, and whether it should apply to the petitioner's case.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Dismissal of the Petitioner's Appeal Due to Notification No. 53 of 2023

Relevant Legal Framework and Precedents: The Central Board of Indirect Taxes and Customs issued Notification No. 53 of 2023, which allowed appeals to be filed for orders passed prior to 31.03.2023. Section 107 of the CGST Act provides the time frame for filing appeals.
Court's Interpretation and Reasoning: The court noted that the petitioner's appeal was dismissed because the assessment order was dated after the cut-off date of 31.03.2023. However, a Division Bench had previously allowed appeals for orders passed after this date, questioning the rationale behind the cut-off.
Key Evidence and Findings: The petitioner complied with the notification's conditions by filing the appeal within the extended period and paying the required tax and deposit. However, the appeal was dismissed due to the date of the assessment order.
Application of Law to Facts: The court applied the reasoning from the Division Bench's decision, which found no rationale for the cut-off date and suggested a more flexible approach.
Treatment of Competing Arguments: The court considered the notification's intent and the Division Bench's interpretation, ultimately siding with the latter's broader interpretation.
Conclusions: The court concluded that the petitioner's appeal should be considered on its merits, setting aside the dismissal based on the cut-off date.

Issue 2: Entitlement to Appeal Consideration on Merits

Relevant Legal Framework and Precedents: The court referenced the Division Bench's decision that allowed appeals beyond the cut-off date, emphasizing the need for a fair opportunity to be heard.
Court's Interpretation and Reasoning: The court found the cut-off date arbitrary and lacking rationale, thus directing the Appellate Authority to consider the appeal on its merits.
Key Evidence and Findings: The petitioner's compliance with the notification's conditions and the Division Bench's precedent were crucial in the court's decision.
Application of Law to Facts: The court applied the Division Bench's reasoning to the petitioner's case, determining that the appeal should be heard on its merits.
Treatment of Competing Arguments: The court balanced the notification's procedural requirements with the need for substantive justice, favoring the latter.
Conclusions: The court directed the Appellate Authority to resume the appeal and dispose of it on merits, ensuring the petitioner's right to a fair hearing.

3. SIGNIFICANT HOLDINGS

Verbatim Quotes of Crucial Legal Reasoning: "We do not see any rationale for the date fixed of 31.03.2023, as a cut-off date. We notice that the notification itself was brought out on 02.11.2023 and in such circumstances any order passed in at least three months before that date; the time provided for filing an appeal, ought to have been considered for such beneficial treatment."
Core Principles Established: The court established that procedural cut-off dates should not arbitrarily prevent substantive justice, particularly when a broader interpretation is supported by precedent.
Final Determinations on Each Issue: The court set aside the dismissal of the petitioner's appeal based on the cut-off date and directed the Appellate Authority to consider the appeal on its merits for both assessment years 2017-18 and 2018-19.

Overall, the judgment emphasizes the importance of fair appellate consideration and the need to interpret procedural rules in a manner that facilitates justice rather than impedes it.

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