Madras HC directs Department to hear appeal on merits filed beyond condonable period

[CA Bimal Jain]

The Hon’ble Madras High Court, in the case of M/S. SRI SHANMUGA MOTORS VERSUS THE STATE TAX OFFICER TAMIL NADU, THE DEPUTY COMMISSIONER (ST) SALEM - 2024 (9) TMI 489 - MADRAS HIGH COURT had set aside the Appellate Order and directed the Department to hear the appeal on merits which has been filed beyond the condonable period for filing of appeal without going into the question of limitation.

Facts:

M/s Sri Shanmuga Motors (“the Petitioner”) filed appeal against Assessment Order dated September 09, 2023 passed by the State Revenue Department (“the Respondent”). Thereafter, the Petitioner filed an appeal before the Respondent Authorities; However, the appeal was rejected by the Appellate Authority vide order dated January 30, 2024 (“the Impugned Appellate Order”). The rejection was based on the ground that the appeal was filed beyond the condonable period prescribed under Section 107(4) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).

Issue:

Whether the Appellate Authority is empowered to hear appeal on merits without going into the question of limitation?

Held:

The Hon’ble Madras High Court in the case of M/S. SRI SHANMUGA MOTORS VERSUS THE STATE TAX OFFICER TAMIL NADU, THE DEPUTY COMMISSIONER (ST) SALEM - 2024 (9) TMI 489 - MADRAS HIGH COURT held as under:

• Noted that, the Petitioner had asserted in the affidavit that the tax liability was imposed despite the ingredients necessary for invoking Section 74 of the CGST Act were not satisfied.
• Held that, the Impugned Appellate Order is set aside as the period of delay beyond the condonable period is only 21 days and directed the Respondent to receive and dispose of the appeal without going into the question of limitation.

Our Comments:

In a Pari Materia case of TVL. SRI SAI TRADERS VERSUS DEPUTY COMMISSIONER (ST) , COIMBATORE AND STATE TAX OFFICER POLLACHI (WEST) - 2024 (8) TMI 981 - MADRAS HIGH COURT the Hon’ble Madras High Court set aside the order rejecting the appeal which was 29 days beyond the three-month limitation and directed the Appellate Authority to consider the appeal on the merits without considering the limitation issue.

The Hon’ble Calcutta High Court in the case of JAYANTA GHOSH AND ORS. VERSUS THE STATE OF WEST BENGAL AND ORS.  - 2024 (3) TMI 779 - CALCUTTA HIGH COURT and MURTAZA B KAUKAWALA VERSUS STATE OF WEST BENGAL AND ORS. - 2024 (4) TMI 508 - CALCUTTA HIGH COURT , by invoking Section 5 of the Limitation Act, allowed the appeal filed beyond the limitation period interlalia holding that an Appellate Authority cannot dismiss the appeal on the ground of limitation without granting any opportunity of hearing. The delay can be condoned if the principles of natural justice has been violated by not providing the opportunity of hearing to the Appellant and the period prescribed for filing of appeal is not final.

However, The Hon’ble Kerala High Court in PENUEL NEXUS PVT. LTD., REP. BY ITS MANAGING DIRECTOR SRI. M.O. JOSEPH VERSUS THE ADDITIONAL COMMISSIONER HEADQUARTERS (APPEALS) , STATE TAX OFFICER, TAXPAYER SERVICES CIRCLE, COCHIN - 2023 (6) TMI 941 - KERALA HIGH COURT held that the Additional Commissioner is right in rejecting the time-barred appeal as section 107 of the CGST Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act, 1963.

Further, The Hon’ble Allahabad High Court in the case of M/S YADAV STEELS HAVING OFFICE VERSUS ADDITIONAL COMMISSIONER AND ANOTHER - 2024 (2) TMI 1069 - ALLAHABAD HIGH COURT, dismissed the writ petition, thereby holding that, Section 5 of the Limitation Act would not be applicable for appeal filed under Section 107 of the UPGST Act.

 (Author can be reached at [email protected])