Time-barred appeal cannot be avoided by merely failing to upload the order copy to the GSTN portal
Fact and issue of the case
Rule returnable forthwith. Learned advocates appearing for the respective respondents waive service of notice of rule.
These petitions, though different on facts, essentially raise a common question of interpretation of Section 107 of the Central Goods and Services Tax Act, 2017 (“CGST” for short) and Rule 108 of the Central Goods and Services Tax Rules, 2017 and related provisions.
SPECIAL CIVIL APPLICATION NO.14867 of 2022
This petition is filed for the following prayers:
“9(a) That this Hon’ble Court may be pleased to issue a writ of Mandamus or an appropriate writ, order or direction, ordering, directing or declaring the Ld. Assistant Commissioner to make available and upload the electronic copy of the OIO dated 23.08.2019, on the GST Portal for the purpose of filing appeal in accordance with Section 107 of hte CGST Act, 2017 and Rule 108(1) of the CGST Rules, 2017. (AA) That this Hon’ble Court may be pleased to issue a Writ Petition of Mandamus or an appropriate writ in the nature of Mandamus or any other appropriate writ, order or direction, to quash and set aside the Impugned Order in Appeal passed by Ld. Commissioner (Appeals) to the extent it has held that the impugned order in original dated 23.08.2019 has attained the finality and denied the refund of unutilized input tax credit.
(b) That this Hon’ble Court may be pleased to issue a writ of Mandamus or an appropriate writ in the nature of Mandamus or any other appropriate writ, order or direction ordering, directing or declaring the Ld. Assistant Commissioner to re-credit the rejected amount of refund claim to the Electronic Credit Ledger of the Petitioner in accordance with Rule 93 of the CGST Rules, 2017.
Facts of the said petition, briefly stated, indicate that the petitioner is a Public Limited Company engaged in the manufacture of food products such as biscuits, bread, rusk etc. The manufacturing unit is situated in Kandla Special Economic Zone and is engaged in the export of goods under Letter of Undertaking. It is the case of the petitioner that it accumulated unutilized Input Tax Credit of IGST distributed by the Input Service Distributor for services related to the SEZ Unit in its Electronic Credit Ledger.
An application under Section 54 of the CGST Act was filed for refund amounting to Rs.37,28,087/- for the period from April 2019 to June 2019. The application was filed on 16.7.2019. The claim for refund was rejected on 23.08.2019 and the Order-In-Original (O-I-O) was manually served. A fresh application was filed on 27.10.2020.
The authorities issued a Show Cause Notice on 11.11.2020 asking the petitioner to show cause as to why a fresh application was filed for refund once the claim was rejected vide an order dated 23.08.2019 and no appeal was filed against the same. A reply was filed on 1.12.2020 and by an Order in Original dated 3.12.2020 the claim was once again rejected on the ground that once the Order dated 23.08.2019 rejecting the same claim was passed and no Appeal was filed,the same having attained finality, the claim was not maintainable.
An appeal filed against the order dated 3.12.2020 was rejected by the Appellate Authority on 21.06.2021 on the ground that there was no powers to review an earlier order. It is the case of the petitioner that had the Order-In-Original dated 23.08.2019 been uploaded the petitioner could have filed an appeal under Rule 108 of the CGST Rules and but for it not being done so,the petitioner could not file an Appeal electronically, which is the only manner of filing appeals. Non-receipt of an electronic copy of the order prevented the petitioner from filing an appeal in the required electronic mode.
SPECIAL CIVIL APPLICATIONS NO.4876 and 5731 of 2023
Since the facts and the prayers of these two petitions are common, prayers and facts of Special Civil Application No. 4876 of 2023 are set out below:
8. (a) That this Hon’ble Court may be pleased to grant an interim relief by issuing an appropriate Writ of Certiorari and Writ of Mandamus or an appropriate writ, order or direction under Article 226 of the Constitution of India, ordering and directing the respondent to release all bank accounts of the Petitioners as provided in Annexure-B, by way of quashing the letters of Respondent No. 3 dated 09.12.2022 and 12.12.2022.
(b) That this Hon’ble Court may be pleased to grant an interim relief by issuing an appropriate Writ of Certiorari and Writ of Mandamus or an appropriate writ, order or direction under Article 226 of the Constitution of India, asking the Respondent No. 2 to upload the Impugned Order 29.04.2021 on GSTN Portal as is mandated under Section 107(1) of the CGST Act, 2017 read with Rule 108(1) of the CGST Rules, 2017.
(c) That this Hon’ble Court may be pleased to grant an interim relief by issuing an appropriate Writ of Certiorari and Writ of Mandamus or an appropriate writ, order or direction under Article 226 of the Constitution of India, to quash and set aside the Impugned Orders passed by Respondent No. 2 and decide them afresh after according an opportunity of hearing.
The petitioners are partners in a partnership firm M/ S Sukhdham Upvan formed for a real estate scheme. The shares are 11% and 4% respectively. That one Darpan Shah is a Managing and a Majority partner. It is the case of the petitioner that on inquiry with the Bank the petitioner was informed that by virtue of notices dated 9.12.2022 and 12.12.2022, the Assistant Superintendent of CGST had directed the Bank to debit-freeze the accounts of the petitioner in lieu of tax recoveries from the Partnership Firm. The recovery of Rs.99,18,154/-service tax dues was outstanding by virtue of the order dated 31.3.2021 and Rs.3,31,12,518 towards GST dues vide order dated 29.04.2021.
It is the case of the petitioners that the Orders-In-Original dated 31.3.2021 and 29.4.2021 were never uploaded on the GST Portal and hence the petitioners were prevented from filing the appeals which can only be filed through electronic mode and not manually as the process other than electronic mode is not notified. It is the case of the petitioners that the hand delivery of the orders was given on 6.1.2023 and an appeal has been filed in the service tax matter in connection with the order dated 31.3.2021 whereas since the order dated 29.4.2021 wasn’t uploaded the petitioners are prevented from filing appeal and therefore the consequential debit-freezing of accounts is bad.
Mr. Anandodaya Mishra Learned Advocate for the petitioners would make the following submissions: Special Civil Application No.14867 of 2022
(i) The order dated 23.08.2019 ought to have been uploaded on the web portal in accordance with Rule 26(1) and Rule 26(3) of the CGST Rules,2017. In the matter of the petitioner itself in Special Civil Application No. 15473 of 2019, the issue of refund was held admissible and therefore even if no appeal was filed, the principle ought to have been accepted and orders for the subsequent period issued.
(ii) The petitioner could only have filed an appeal electronically as mandated under Rule 108 of the CGST Rules and by no other mode and the fact that the O-I-O was not uploaded as required under Rule 26 it must be considered as non-communication of the order and therefore the subsequent order observing that as no appeal was filed the refund issue had become final is bad and illegal. The mandate of Rule 108 was that an appeal has to be filed by electronic mode and that could only have been done had the original order been uploaded.
(iii) In support of his submissions Mr. Mishra would extensively read out the provisions of Section 107 and Rule 108 of the CGST Act and the Rules. He would also press into service Rules 26(1) and 26(3) to submit that every order should be uploaded on the web portal.
(iv) That there is no provision that even if an order is not uploaded, an appeal can be filed electronically on the web portal. Unless the order is uploaded under Rule 26 read with Rule 142 no appeal can be filed.
(v) Relying on the recommendation of the GST Council in its 50th Meeting where a view was expressed to amend the Rule 108 to enable manual filing of the appeal, it is his submission that no appeal could have been filed except electronic mode and therefore because of the order having not been uploaded the appeal could not be filed.
Observation of the court
In the present case, having regard to the express provisions of sub-Section (1) and (4) of Section 107 of the said Act, we have no manner of doubt, that for the purpose of limitation, the date of communication of the impugned assessment order is to be regarded as April 20, 2019 viz the date on which the order was sent by email to the petitioner. In the facts of this case, having regard to the express and unambiguous language of sub-section (1) of Section 107 of the said Act, we do not find any force in the contention of learned counsel for the petitioner, that the date of uploading of the impugned assessment order on the GSTN portal has to be regarded as the date of communication for the purpose of calculating limitation. We have no hesitation in holding that the petitioner failed to avail of the remedy provided by the said Act for filing of an appeal within the period prescribed and therefore rightly not accepted and entertained by the appellate authority beyond the extended statutory limitation period of one month in terms of sub-section (4) of Section 107. In support of the view that we take, a profitable reference needs to be made to paragraph 24, 25 and 26 of the decision in the case of Assistant Commissioner (CT) LTU, Kakinada (supra) which reads thus :-
Reliance was then placed on a three Judge Bench decision of this Court in ITC Ltd. & Anr. Vs. Union of India. In that case, the High Court had dismissed the writ petition on the ground that the petitioner therein had an adequate alternative remedy by way of an appeal under Section 35 of the Central Excise Act. Concededly, this Court was pleased to uphold that opinion of the High Court. However, whilst considering the difficulty expressed by the petitioner therein that the statutory remedy of appeal had now become time barred during the pendency of the proceedings before the High Court and before this Court, the Court permitted the petitioner therein to resort to remedy of statutory appeal and directed the appellate authority to decide the appeal on merits. This obviously was done on the basis of concession given by the counsel appearing for the Revenue as noted in paragraph 2(1) of the order, which reads thus:
The High Court has dismissed the writ petition filed by the petitioner on the ground that there is an adequate alternative remedy by way of an appeal under Section 35 of the Central Excise Act. Learned counsel for the petitioner submits that the petitioner will face certain difficulties in pursuing this remedy: (1) This remedy may not be any longer available to it because the appeal has to be filed within a period of three months from the date of the assessment order and delay can be condoned only to the extent of three more months by the Collector under Section 35 of the Act. It is pointed out that the petitioner did not file an appeal because the Collector (Appeal) at Madras had taken a view in a similar matter that an appeal was not maintainable. That apart, the petitioner in view of the huge demand involved filed a writ petition and so did not file an appeal. In the circumstances of the case, we are of the opinion that the ends of justice will be met if we permit the petitioner to file a belated appeal within one month from today with an application for condonation of delay, whereon the appeal may be entertained. Learned counsel for the Revenue has stated before us that the Revenue will not object to the entertainment of the appeal on the ground that it is barred by time. In view of this direction and concession, the petitioner will have an effective alternative remedy by way of an appeal. (emphasis supplied)
In that case, it appears that the writ petition was filed within statutory period and legal remedy was being pursued in good faith by the assessee (appellant).
Suffice it to observe that this decision is on the facts of that case and cannot be cited as a precedent in support of an argument that the High Court is free to entertain the writ petition assailing the assessment order even if filed beyond the statutory period of maximum 60 days in filing appeal. The remedy of appeal is creature of statute. If the appeal is presented by the assessee beyond the extended statutory limitation period of 60 days in terms of Section 31 of the 2005 Act and is, therefore, not entertained, it is incomprehensible as to how it would become a case of violation of fundamental right, much less statutory or legal right as such.” (Underlining by us)” 14.5 In para 12 of the judgement, it has been held that Rule 108 no doubt prescribes that the appeal has to be filed electronically, but it nowhere prescribes that the same is to be filed only after the impugned order is uploaded on the GSTN Portal. The date of communication of the order by email was taken as the date of communication of the order for the purposes of limitation.
The decision of Gujarat Petronet (supra) was considered and the Division Bench held as under in Para 17 thereof: “
The decision relied upon by the petitioner in the case of Gujarat Tate Petronet Limited (supra) is rendered in a different fact situation. The petitioner therein approached the adjudicating authority time and again for uploading the order on the GST portal, however, the adjudicating authority was unable to do so due to certain technical issues. The order passed by the adjudicating authority was not served nor was it uploaded on the GST portal and due to nonavailability of the refund order, the petitioner could not prefer the appeal in the electronic form as required under the GST laws. Reverting to the facts of the present case, though the petitioner was in receipt of the impugned assessment order by email on April 20, 2019 itself, the petitioner applied for certified true copy of the order dated April 20, 2019 on November 5, 2019, only after the recovery proceedings were initiated against the petitioner by attaching the bank account on July 1, 2019. The petitioner has by such belated action lost the statutory remedy of appeal. Consequently, in view of the law laid down by the Apex Court, it is not possible for us to entertain the petitioner’s challenge to the impugned assessment order.”
The Bombay High Court held that the decision in Gujarat Petronet (supra) was rendered in a different situation. The authorities therein could not upload the order due to the technical glitches. The Bombay High Court held that once the assessment order had become final as the petitioner had only applied for a copy of the order after the recovery proceedings were initiated, he had lost his statutory right to appeal.
In both the petitions namely in Special Civil Applications No. 4876 and 5731 of 2023, the petitioners have filed the appeals only after the orders of recovery have been passed though being aware and being manually served with the orders dated 31.3.2021 and 29.4.2021 and therefore merely because the orders were subsequently uploaded will not render or save their appeals from the same having been time barred especially when recovery proceedings have already been done and orders to debit freeze accounts have been made in exercise of powers under Section 79 of the CGST Act and not as submitted by the learned advocate for the petitioner, under Section 83 of the Act. Section 79(1)(c) of the CGST Act empowers the department to directly debit the amount lying in the bank accounts.
As far the case of the partners in these petitions to contend that they are now not liable, Section 90 of the CGST Act provides that the firm and each of the partners of the firm shall be jointly and severally liable for any dues. The section has been a part of the reproduction of the reply in this part of the judgement and hence is not so reproduced.
In Special Civil Application No.14867 of 2022 as well as in Special Civil Applications No. 4876 of 2023 and 5731 of 2023, the prayers in the respective petitions are not accepted. The petitions are accordingly dismissed with no orders as to costs. Rule is discharged.
In the result, appeal of the assessee is allowed and ruled in favour of the assessee
Read the full order from hereBritannia-Industries-Limited-Vs-Union-of-India-Gujarat-High-Court-2