2024 (5) TMI 1185 - HC - GST

Validity of adjudication order u/s 73 of CGST Act, 2017/WBGST Act, 2017 - appeal barred by time limitation - provision under Section 107 of the Act to accept the appeal after one month of prescribed period of limitation as provided under Section 107 (4) of Act or not - HELD THAT - Admittedly, in this case the appeal preferred by the petitioner before the Appellate Authority was barred by limitation since, the same was filed beyond the time prescribed. The petitioner had, however, in response to the show cause notice had explained the delay in filing the appeal. It appears that condonation of delay was sought for on medical reasons. Although, the appellate authority did not disbelieve the medical certificate, however, had arrived at a conclusion since the petitioner could carry on business, there was no reason for the petitioner not to file the appeal within the prescribed period. Despite observing as such, the Appellate Authority, however, proceeded to dismiss the appeal by holding that there is no provision laid down under Section 107 of the said Act to accept an appeal after one month from the prescribed period of limitation. The Appellate Authority had chosen not to question the medical certificate produced by the petitioner. Once, the Appellate Authority had accepted the medical certificate, there was nothing on record for the Appellate Authority to conclude since the petitioner could carry on business despite illness by submission of GSTR-1 and GSTR-3B in due time, the illness could not be a reason for the petitioner not to file the appeal in time - Since, on the disclosure made by the petitioner it is apparent that the petitioner was prevented by medical reasons from filing the aforesaid appeal in time, the Appellate Authority ought to have, by taking the same into consideration condoned the delay. The discretion exercised by the Appellate Authority in refusing to accept the explanation does not appear to be justifiable, rather arbitrary. The discretion exercised by the Appellate Authority in refusing to accept the explanation does not appear to be justifiable, rather arbitrary. Having regard to the same, the delay in preferring the appeal should be and is accordingly condoned - the order passed in Form GST APL-02 dated 6th March, 2024 is set aside. The appeal is restored to its original file and number. The writ petition is disposed of.

Summary

Issues:
Challenge to adjudication order under GST Act, Appeal barred by limitation, Refusal to condone delay by Appellate Authority, Consideration of medical reasons for delay, Disbelief of explanation by Appellate Authority, Jurisdiction of Appellate Authority, Condonation of delay, Restoration of appeal, Opportunity for hearing, Debit from electronic ledger, Disposition of writ petition.

Analysis:
The petitioner challenged an adjudication order under the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017, which was issued in Form DRC-07. The appeal filed before the Appellate Authority was found to be time-barred. The Appellate Authority rejected the appeal citing the absence of a provision to accept appeals beyond the prescribed limitation period under Section 107 of the Act.

During the proceedings, the petitioner explained the delay in filing the appeal, citing medical reasons. The Appellate Authority, although not questioning the medical certificate provided, concluded that since the petitioner continued business activities, there was no valid reason for the delay. The Court noted that the Appellate Authority's decision was unjustified and arbitrary, especially considering the Division Bench's precedent allowing appeals beyond the limitation period under similar circumstances.

The Court held that the Appellate Authority erred in not considering the application for condonation of delay. It emphasized that the petitioner's compliance with statutory obligations, despite illness, should not be penalized. Consequently, the Court set aside the Appellate Authority's order, condoned the delay, and restored the appeal for further proceedings.

The Appellate Authority was directed to hear and decide the appeal on its merits, providing an opportunity for the petitioner to present their case expeditiously. Additionally, the issue of the amount debited from the petitioner's electronic ledger was to be addressed by the Appellate Authority during the appeal process.

Ultimately, the writ petition was disposed of with no order as to costs, and parties were granted access to a certified copy of the order upon request and compliance with necessary formalities.