What is in a month with respect to GST Perspective

[K Balasubramanian]

1. Section 107 (1) of the CGST Act, 2017 provides for a time limit of three months for filing the First Appeal. This time limit is to be counted from the date of communication of the adjudicating order to the taxpayer. Sub section 2 of Section 107 provides for a time limit of six months in case the department wishes to appeal against the decision arrived in the adjudication order. Sub section 4 grants one more month to the Appellate Authority (Over and above 3 months or 6 months as the case may be) to condone the delay.

2. When a taxpayer desires to go on appeal with the First Appellate Authority, several formalities including pre deposit as well as preparing as well as filing the appeal are involved. Normally it takes time to understand the consequences of the adjudication order and with the help of a tax consultant, the taxpayer must weigh the options of paying the taxes with interest and close the case or going on appeal.

3. Even though every taxpayer wishes to file the appeal within stipulated timeline, due to facts and circumstances of the case as well as due to things which are beyond the control of the taxpayer, some delay in filing the appeal occurs.

4. Recently, The Kerala High Court had an occasion to examine the case where the adjudication order was passed on 06/07/2023 whereas the appeal could be filed on 06/11/2023. The Appellate Authority rejected the appeal treating the month as a period consisting of 30 days. When the Kerala High Court examined this issue on 22/10/2024 in the case of M/S. N.N STEEL TRADING CO. VERSUS THE JOINT COMMISSIONER (APPEALS) , CENTRAL TAX, CENTRAL EXCISE AND CUSTOMS, THE ASSISTANT COMMISSIONER, THE CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS AND UNION OF INDIA, DELHI - 2025 (3) TMI 541 - KERALA HIGH COURT, the issue was examined at length with the help of the ruling of the Supreme Court in the case of STATE OF HIMACHAL PRADESH & ANR. VERSUS M/S HIMACHAL TECHNO ENGINEERS & ANR. - 2010 (7) TMI 875 - SUPREME COURT.

5. One of the questions that is answered by the Supreme Court is whether the period of three months can be counted as 90 days. It was held that A month does not refer to a period of thirty days but refers to the actual period of a calendar month. If the month is April, June, September or November, the period of month will be thirty days. If the month is January, March, May, July, August, October, or December the month will be thirty-one days. If the month is February, the period will be twenty-nine days or twenty-eight days depending upon whether it is a leap year or not.

6. Interestingly, as the legislature did not use 30 days or 90 days and preferred one month and three months in the relevant sections, a month can not be construed to be 30 days.

7. The Supreme Court has held that when the period prescribed is three months (as contrasted from 90 days) from a specified date, the said period would expire in the third month on the date corresponding to the date upon which the period starts. As a result, depending upon the months, it may mean 90 days or 91 days or 92 days or 89 days.

8. The Kerala High Court has held based on the above that the appeal filed on 06/11/2023 is within the condonable limit and accordingly, the first appellate authority shall restore the appeal and pass orders.

9. It is hoped that interpretation of one month or three months shall not be considered as 30 days or 90 days in future and would be in line with the observations of the Supreme Court in the case of State of Himachal Pradesh & Another Versus Himachal Techno Engineers & another as above.

10. Let us not waste the precious time of Adjudicating Authority or GSTAT or High Courts on minor issues on condonation of delay and focus on CORE issues by strictly adhering the prescribed timelines.