Can Appeal be rejected on Grounds of Limitation?

Fact and issue of the case

M/s. Navya Foods Private Limited is a Private Limited Company engaged in manufacture of jams, fruit jellies etc and registered under the Central Goods and Services Tax Act, 2017 and the Andhra Pradesh State Goods and Services Tax Act, 2017.

On verification by the department of the GSTR-3B monthly returns filed during the year 2018-19 it was found that some of the GSTR 3B returns were filed beyond the due dates and thus, resulting in delayed payment of CGST/SGST/IGST.

Hence the GST Department demanded payment of interest and penalty of Rs.192892/- and Rs.650800/- respectively. For payment of the said amount, a show cause notice was issued to M/s. Navya Foods Private Limited. Subsequently, an assessment order came to be passed by the GST Department confirming levy of interest of Rs.192892/- and a penalty of Rs.686944/- which is higher than the penalty actually proposed in the show cause notice.

Further, it came to notice that the said order was served on the petitioner physically informing that an appeal would lie under Rule 108(1) of the Central Goods and Services Tax Rules, 2017. Thereafter, An appeal came to be filed by M/s. Navya Foods Private Limited which was then rejected on the ground that it was filed beyond the period of limitation.

Challenging the same the writ petition is hereby filed.

Issues Raised

1) Can Appeal be rejected on Grounds of Limitation?

2) “Issue a Writ of Certiorari or any other appropriate writ or order or direction

a) quashing the order of Additional Commissioner of Central Tax in appeal for the tax period October, 2018 and November, 2018 as illegal, arbitrary, unjustified and contrary to law and consequently direct Additional Commissioner of Central Tax the to admit the appeal and adjudicate the same on merits;

b) or in the alternative set-aside the order in original passed by the Superintendent of Central Tax as one without jurisdiction, contrary to the circular of the Central Board of Indirect Tax and Customs and contrary to Section 75(6) & 75(7) of the Central Goods and Services Tax Act, 2017 and Andhra Pradesh State Goods and Services Tax Act, 2017 in so far as the imposition of penalty of Rs.6,86,944/- for the tax period October, 2018 and November, 2018 is concerned and pass….”

What is Rule 108(1) of the Central Goods and Services Tax Rules, 2017?

“Rule 108. Appeal to the Appellate Authority – (1) An appeal to the Appellate Authority under sub-section (1) of Section 107 shall be filed in FORM GST APL-01, along with the relevant documents, either electronically or otherwise as may be notified by the Commissioner, and a provisional acknowledgement shall be issued to the appellant immediately.

Observation of the court

It was argued on behalf of M/s. Navya Foods Private Limited that in terms of Rule 142(5) of CGST/SGST Rules, a summary of the order issued under Section 73 shall be uploaded electronically in Form GST DRC-07 specifying therein the amount of tax, interest and penalty payable by the person chargeable with tax. It was also noticed that the summary of the order was uploaded by the adjudicating authority only on 18.11.2021 and as such, the period of limitation for filing an appeal has to be reckoned from the said date. Further, the Judgement passed in Gujarat State Petronet Limited vs. Union of India [R/Special Civil
Application No.15607 of 2019] was also brought into light and relied upon.

On the other hand, the arguments from the Department side were seen opposing the same and contending that the reason for rejection is not because of lack of material but on the ground of limitation and as such, the argument on behalf of of M/s. Navya Foods Private Limited that no appeal could be filed by them cannot be accepted. However, it was submitted that in view of the orders passed by the Hon’ble Supreme Court extending the period of limitation due to pandemic, the discretion is always left to the Court to pass appropriate orders.

Observation and Judgement:

A perusal of above provisions would make it clear that the appeal is required to be filed in an electronic mode only and if any other mode is prescribed, then, the same is required to be notified by way of a notification. There is nothing on record to show that any notification was issued prescribing any other mode by which an appeal could be filed.

Therefore, the argument on behalf of M/s. Navya Foods Private Limited that the time period for filing appeal would start only when the order is uploaded in GST portal cannot be brushed aside more so, in view of the Division Bench Judgment of the Gujarat High Court, which has been placed before this Court.

Since the order of Superintendent of Central Tax was sent by e-mail to the petitioner on 25.11.2019, which was admitted by Superintendent of Central Tax itself in Letter O.C.No.148 of 2021, dated 02.03.2021, three months’ time would expire on 24.2.2020 and another one month from there would be on 24.3.2020.

Having regard to the above and taking into consideration the judgment of the Hon’ble Supreme Court referred to above, it can be, therefore, held that filing of appeal by the petitioner on 03.12.2020 is within the period of limitation.

Accordingly, the order, dated 30.7.2021, in Appeal passed by Additional Commissioner of Central Tax is set aside and the matter is remanded back to Additional Commissioner of Central Tax for adjudicating the dispute on merits in accordance with law. There shall be no order as to costs.