Introduction
The ability to prefer an appeal in the litigation process is a given. Although there have been many instances where, due to the timing of presenting the appeal, it has been rejected due to time limitations. There have been few for and few against decisions by various high courts in GST. In this article, we deliberate on the applicability of time limitations under the GST law and take the readers through various judgements to arrive at a reasonable conclusion in this regard.
Relevant Provisions:
Section 107 of CGST Act : Appeals to Appellate Authority
(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.
(2) ……….
(3) ………..
(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.
Section 5 of the Limitation Act 1963 - Extension of prescribed period in certain cases: Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.
Explanation — The fact that the appellant or the applicant was missed by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section.”
Section 29 (2) of Limitation Act 1963: Savings.— (2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.
Section 14 of Limitation Act 1963: The time spent in prosecuting remedy before a wrong forum/Court under bona fide belief would be excluded for computing the time limit for filing the Appeal before right forum. Following are some of the important conditions required to be satisfied to get exclusion of time spent for computing the period of limitation:
- The appeal has been filed in wrong Court not having the jurisdiction.
- The prior appeal has been filed & prosecuting with due diligence & in good faith.
- The subject matter in issue involved in both the appeals is very much same.
- Appeal has been dismissed by the earlier Court for want of jurisdiction or other cause of like nature.
Note: Section 14 is not reproduced as it is but brief explanation provided for easy understanding.
Applicability of Limitation Act in GST
From Section 107 of CGST Act 2017, we have understood that there is a time limit of appeals to appellate authority. Section 109 also provides for time limit of three months for filing appeals with tribunal. There have been genuine cases wherein the taxpayers could adhere to these timelines and requesting authorities for accepting delayed filing of appeals. Since, the GST law provides for timelines, such extension would not be possible. Few of the taxpayers have approached the high courts wherein relief has been provided to few and few have not got any relief from high courts based on the Limitation Act 1963. An attempt is made to understand various decisions of the court to understand if the Limitation Act has an overriding effect over GST provisions.
Decisions wherein benefit was provided
Mukul Islam Vs Assistant Commissioner of Revenue (Calcutta High Court) – Writ petition no.917 of 2024 (May 2024)
Summary analysis - The court set aside the order rejecting the appeal and directed the appellate authority to hear and dispose of the appeal on its merits, condoning the delay basing on the fact that GST Law does not specifically exclude Limitation Act. The judgment emphasized the need for expeditious resolution of tax-related matters while upholding principles of natural justice.
The petitioner, aggrieved by a determination under Section 73 of the said Act dated 26th June, 2023, had filed an appeal under Section 107. However, since the appeal was filed beyond the limitation period, it was accompanied by an application under Section 5 of the Limitation Act, 1963. The appellate authority rejected the application for condonation of delay by its order dated 27th March, 2024, consequently disposing of the appeal.
He cited a judgment by a Division Bench of the court in K. Chakraborty & Sons v. Union of India, emphasizing the applicability of Section 5 of the Limitation Act, 1963.
Section 29(2) of the Limitation Act, 1963 has held that since, there is no expressed or implied exclusion of Section 5 of the Limitation Act, by virtue of Section 29(2) of the Limitation Act, Section 5 of the Limitation Act 1963 stands attracted.
Ms. Sarkar, representing the State respondents, contended that Section 107(4) of the said Act does not empower the appellate authority to condone delay beyond one month from the prescribed period, thereby excluding the applicability of Section 5 of the Limitation Act, 1963.
Decisions wherein benefit was denied
Yadav Steels Having Office Vs Additional Commissioner And Another (Allahabad High Court) – WP 975 of 2023
Summary Analysis - The court rejected the appeal, did not condone the delay. CGST Act is a self-contained code and Limitation Act would not be applicable here.
M/s. Yadav Steels has filed a writ petition against the order dated January 23, 2023, passed under Section 107 of the UPGST Act wherein the appeal filed by the Petitioner was dismissed on the ground of limitation as the said appeal was filed approximately 66 days beyond the date of limitation.
The High Court observed that, Section 107(4) of the UPGST Act, allows extension for a period of one month. Also, Section 107 aims to prevent undue delay in the adjudication process and promote effective administration of the GST regime.
Relying upon the judgment of Hon’ble Allahabad High Court in the case of M/S Abhishek Trading Corp. - 2024 (2) TMI 1214 – Allahabad High Court and noted that, CGST Act 2017 is a special statute and a self-contained code in itself and Section 5 of the Limitation Act, 1963 would not be applicable.
The court also opined that, the judgement Hon’ble Calcutta High Court in the case of S.K. Chakraborty & Sons – Calcutta High Court - 2023 (12) TMI 290, wherein it was held that Section 5 of the Limitation Act, would be applicable as Section 107 of the CGST Act does not expressly or impliedly exclude the attraction of Section 5 of the Limitation Act, would not be applicable in the present case.
Garg Enterprises Vs State of U.P. And 2 Others (Allahabad High Court) – WP 291 of 2022
Summary Analysis - The court rejected the appeal, did not condone the delay. CGST Act is a self-contained code and Limitation Act would not be applicable here. Relied on two Supreme Court verdicts.
Exclusion of Limitation Act: The court referenced the Supreme Court’s decision in Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur (2008) 3 SCC 70. The apex court held that the Commissioner of Central Excise (Appeals) and similar authorities cannot condone delays beyond the statutorily provided period, explicitly excluding the application of Section 5 of the Limitation Act.
CGST Act as a Special Statute: The court emphasized that the CGST Act is a special and self-contained code. Section 107 of the Act explicitly outlines limitations, implying the exclusion of Section 5 of the Limitation Act. The court cited Commissioner of Customs and Central Excise vs. Hongo India Private Limited (2009) 5 SCC 791 to reinforce the view that the absence of a provision to condone delays after the prescribed period indicates a complete exclusion of Section 5.
Decision: The court highlighted that the CGST Act, being a special statute, provides its own mechanism for limitations, leaving no room for the application of general provisions from the Limitation Act.
Venkateswara Rao Kesanakurti vs State of Andhra Pradesh [TS-549-HC(AP)-2024-GST]
Decision held by HC - Limitation Act not applicable to condone appeal filing delay beyond one month
Refers to SC decisions in Popular Construction Co, Singh Enterprises, where considering similar provisions, it was held that restriction of the additional period, for which delay may be condoned, in the special statute, effectively excluded Section 5 of the Limitation Act.
Supreme court decisions
Many of the high court decisions wherein benefit of extension of time limit was not provided had relied on supreme court decisions in case of Hongo India Private Limited and Singh Enterprises wherein the supreme court denied the benefit of time limit extension. However, it is possible for taxpayers to rely on the other decision of supreme court MP Steel Corporation v.CCE [(2015) 7 SCC 58] wherein it was held that on the principles contained in Section 14 of the Limitation Act the time taken in prosecuting an abortive proceeding would have to be excluded as the appellant was prosecuting bona fide with due diligence the appeal before CEGAT. Therefore, in GST also one could argue that when Section 14 of the Limitation Act is made applicable, then Section 5 also should be considered for extension of time limit.
The supreme court in case of Superintending Engineer/ Dehar Power House Circle Bhakra Beas Management Board (pw) Slapper & Another Vs. Excise & Taxation Officer, Sunder Nagar/Assessing authority 2019 LawSuit(SC) 1799 has held that there is no express exclusion of Limitation Act 1963 in HP VAT Act 2005 and delay in filing appeal was condoned. The court also held that the decision of Hongo India Private Limited is not relevant as the scheme of the Excise Act is materially different than that of the Himachal Pradesh VAT Act.
Conclusion
While we await the Apex Court to consider varied judgements, as the GST law does not specifically exclude the Limitation Act, on a case-to-case basis, where the situation warrants such condonation, writ applications may be made as there are few supreme court decisions as well which may come in aid. Recent High Court decisions in favour of Revenue may make this a bit more difficult. Taking the assistance of professionals/advocates is recommended in this regard.
Suggestions or feedback can be sent to [email protected] and [email protected].
This article was first published in KSCAA Journal.