2025 (2) TMI 366 - HC - GST

Dismissal of appeals on the ground of limitation as per Section 107 of the Central and Goods Services Tax Act 2017 - power of Appellate Authority under Section 107 (4) of the CGST Act to condone the delay in filing an appeal beyond one month after the expiration of the three-month period specified in Sub-section (1) of Section 107 for filing an appeal against a decision or order issued by an adjudicating authority under the CGST Act - HELD THAT - An assessee aggrieved by an order passed by the Adjudicating Authority may appeal to the Appellate Authority within three months from the date on which the said decision or order is communicated to such person. Sub-Section (4) of Section 107 of the CGST Act provides discretion to the Appellate Authority to entertain an appeal if it is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the prescribed three-month period provided the appeal is presented within an additional period of one month. It is well settled that once a statute prescribes a specific period of limitation the Appellate Authority does not inherently hold any power to condone the delay in filing the appeal by invoking the provisions of Section 5 or 29 of the Limitation Act 1963. Reference can be invited to the decision of the Chhattisgarh High Court in Nandan Steels Power Ltd. v. State of Chhattisgarh 2022 (8) TMI 631 - CHHATTISGARH HIGH COURT wherein it was held that the statutory timeline for filing an appeal under Section 107 (1) of the CGST Act is three months from the date the decision or order is communicated to the appellant. However Section 107 (4) provides a limited extension of one additional month at the discretion of the appellate authority if sufficient cause is demonstrated. The Court observed that the Legislature while allowing an extension in specific instances did not intend for the Limitation Act to apply to proceedings under the CGST Act. Conclusion - The power to condone delay caused in pursuing a statutory remedy would always be dependent upon the statutory provision that governs. The right to seek condonation of delay and invoke the discretionary power inhering in an appellate authority would depend upon whether the statute creates a special and independent regime with respect to limitation or leaves an avenue open for the appellant to invoke the general provisions of the Limitation Act to seek condonation of delay. The facility to seek condonation can be resorted provided the legislation does not construct an independent regime with respect to an appeal being preferred. Once it is found that the legislation incorporates a provision which creates a special period of limitation and proscribes the same being entertained after a terminal date the general provisions of the Limitation Act would cease to apply. Each of the appeals was filed beyond the prescribed period of limitation provided by Sections 107 (1) and 107 (4) of the CGST Act the aforesaid writ petitions lack merit and are accordingly dismissed.

Summary

The core legal issues considered in this judgment revolve around the interpretation of Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act), specifically concerning the appellate authority's power to condone delays in filing appeals beyond the prescribed period. The issues are:

1. Whether the Appellate Authority under Section 107(4) of the CGST Act is authorized to condone the delay in filing an appeal beyond one month after the expiration of the three-month period specified in Sub-section (1) of Section 107 for filing an appeal against a decision or order issued by an adjudicating authority under the CGST Act.

2. Whether the appellate authority is empowered to condone a delay beyond the thirty-day period prescribed under Sub-section (4) of Section 107 of the Act of 2017, and whether the Court, in exercising its extraordinary jurisdiction under Article 226 of the Constitution of India, may direct the condonation of such delay if an exceptional case is made out or if the interest of justice demands it.

The Court's detailed analysis of these issues is as follows:

The legal framework for these issues is primarily based on Section 107 of the CGST Act, which outlines the procedure for appeals to the Appellate Authority. Sub-section (1) of Section 107 allows an aggrieved person to appeal within three months from the date of communication of the decision or order. Sub-section (4) provides a further period of one month for filing the appeal if the appellant was prevented by sufficient cause from presenting the appeal within the initial three-month period.

The Court interpreted Section 107 as a self-contained code with a specific limitation period for filing appeals. It emphasized that the Appellate Authority does not possess inherent powers to condone delays beyond the additional one-month period specified in Sub-section (4). The Court relied on precedents such as Singh Enterprises v. Commissioner of Central Excise and Garg Enterprises v. State of U.P., which establish that statutory authorities cannot extend the period of limitation beyond what is prescribed by the statute.

The Court considered the petitioners' arguments that the delays were due to various exceptional circumstances, such as clerical errors, COVID-19 disruptions, and lack of proper communication from consultants. However, the Court held that these reasons did not justify extending the limitation period beyond the statutory limits set by the CGST Act.

The Court concluded that the legislative intent behind Section 107 is to ensure timely resolution of disputes and that allowing extensions beyond the prescribed period would undermine this objective. It held that the provision excludes the application of the Limitation Act, 1963, and that the principles of condonation of delay under the Limitation Act do not apply to appeals under the CGST Act.

Significant holdings from the judgment include:

The Court reaffirmed the principle that statutory provisions prescribing limitation periods must be strictly adhered to, and extensions beyond the prescribed period can only be granted if explicitly provided for by the statute. The Court emphasized that the Appellate Authority under the CGST Act does not have the power to condone delays beyond the additional one-month period specified in Section 107(4).

The judgment establishes that the CGST Act is a special statute with its own limitation provisions, which exclude the application of the Limitation Act. This reinforces the principle that tax laws are designed to ensure efficient and timely compliance and dispute resolution.

Final determinations on each issue were that the appeals filed by the petitioners were time-barred as they were filed beyond the statutory period, and the Appellate Authority's decisions to dismiss the appeals on grounds of limitation were upheld. The Court dismissed the writ petitions, affirming the importance of adhering to statutory timelines in tax matters.