2025 (2) TMI 303 - HC - GST

Interpretation of statute - section (4) of Section 107 of the Central Goods and Services Tax Act 2017 - whether the period of three months mentioned in sub-section (1) and the period of one month under sub-section (4) of Section 107 of the Act of 2017 is liable to be interpreted as a period of ninety days and thirty days respectively as has been held by the learned appellate authority? HELD THAT - On a bare reading of sub-section (1) of Section 107 of the Act of 2017 it would appear that the prescribed period for filing an appeal before the appellate authority against an order of the adjudicating authority is three months from the date on which the said decision or order is communicated to the said person. It is also evident that under sub-section (4) the appellate authority has power to condone a delay of further period of one month if the appellate authority is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months. In a recent judgment in case of State of West Bengal vs. Rajpath Contractors and Engineers Ltd. 2024 (7) TMI 457 - SUPREME COURT the Hon ble Supreme Court considered sub-section 3 of Section 34 of the Arbitration and Consolidation Act 1996 and Section 4 of the Limitation Act. In the said case it was found that the award made by the Arbitral Tribunal on 30th of June 2022 was served upon the appellant on the same day. The period of limitation for filing petition under sub-section 3 of Section 34 is three months from the date on which the party making the application had received the arbitral award or if a request had been made under Section 33 of the Arbitratioin Act from the date on which that request had been disposed off by the Arbitral Tribunal. The starting point of the period of limitation was 1st of July 2022 therefore it was held that the last day of the period of three months i.e. 30th September 2022 would be the period of limitation. There are no iota of doubt that in the present case the three months period from the date of receipt of the order of the adjudicating authority expired on 27.03.2024. The appellant could have preferred an appeal within a further period of one month i.e. 27.04.2024 showing sufficient cause to the appellate authority to satisfy him that the appellant was prevented by sufficient cause from presenting the appeal within the further period of one month. In this case the appeal was preferred on 26.04.2024 therefore the appellate authority was required to consider the cause shown by the appellant to condone the delay. Conclusion - The appellate authority has completely erred in appreciating the legislative scheme under Section 107 of the CGST/BGST Act. The legislatures have clearly provided in wisdom that the period of limitation for filing the appeal would be three months and it may be presented within a further period of one month subject to showing sufficient cause to the appellate authority for not preferring the appeal within the prescribed period of limitation. Application allowed.

Summary

ISSUES PRESENTED and CONSIDERED

The central issue in this case was whether the period of three months mentioned in sub-section (1) and the period of one month under sub-section (4) of Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act) and the Bihar Goods and Services Tax Act, 2017 (BGST Act) should be interpreted as a period of ninety days and thirty days respectively. The petitioner contended that the legislative intent was to provide a period of limitation of three calendar months for filing the appeal, with an additional condonable period of one calendar month. The appellate authority had rejected the appeal on the grounds of delay, interpreting the periods as ninety days and thirty days.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

Section 107 of the CGST/BGST Act prescribes a three-month period for filing an appeal against an order, with a possible extension of one month if sufficient cause is shown. The legal question revolves around whether these periods should be understood as calendar months or as a fixed number of days (ninety and thirty days, respectively).

The petitioner cited several Supreme Court judgments, including State of Himachal Pradesh vs. Himachal Techno Engineers, Bibi Salma Khatoon vs. State of Bihar, and Econ Antri Limited vs. Rom Industries Limited, which support the interpretation of "month" as a calendar month.

Court's Interpretation and Reasoning

The Court examined the statutory language of Section 107 and relevant precedents. It emphasized the distinction between "months" as calendar months and "days" as a fixed number of days. The Court noted that the legislature intentionally used different terms ("months" and "days") to indicate different periods and that interpreting "months" as a fixed number of days would be contrary to legislative intent.

Key Evidence and Findings

The Court considered the language of Section 107, the legislative intent, and the principles established by the Supreme Court regarding the computation of time periods. It found that the appellate authority's interpretation was inconsistent with the statutory language and binding precedents.

Application of Law to Facts

The Court applied the interpretation that "months" should be understood as calendar months. It concluded that the appeal filed by the petitioner on 26.04.2024 was within the permissible period, as the three-month period expired on 27.03.2024, and the appeal was filed within the additional one-month period allowed for condonation.

Treatment of Competing Arguments

The State's argument, supported by the judgment in M/s Vaishnavi Enterprises vs. State of Bihar, that months should be treated as thirty-day periods, was rejected. The Court found this interpretation to be in ignorance of the statute and binding precedents, rendering the decision per incuriam.

Conclusions

The Court concluded that the appellate authority erred in its interpretation of the limitation period under Section 107 of the CGST/BGST Act. The appeal was filed within the permissible period, and the appellate authority should have considered the reasons for the delay in filing.

SIGNIFICANT HOLDINGS

The Court held that the term "month" in Section 107 of the CGST/BGST Act should be interpreted as a calendar month, not as a fixed number of days. This interpretation aligns with the legislative intent and Supreme Court precedents.

Core Principles Established

The principle that statutory references to "months" should be interpreted as calendar months unless explicitly stated otherwise was reaffirmed. The Court emphasized the importance of adhering to legislative intent and established judicial precedents in interpreting statutory time periods.

Final Determinations on Each Issue

The Court set aside the appellate authority's order dated 18.05.2024, which had rejected the appeal on the grounds of delay. It directed the appellate authority to restore the appeal to its original file and consider the reasons provided by the petitioner for the delay, acknowledging that the appeal was filed within the permissible period under Section 107(4) of the CGST/BGST Act.