M/S Narayan Mandal vs. The Union Of INDIA

CWJC/1074/2024HC PatnaGSTCNR BRHC01000992202422 January 2024Bench: MR. JUSTICE RAJIV ROY,THE CHIEF JUSTICE-5 pages

AI SummaryPartly Allowed

Facts

The petitioner, M/s Narayan Mandal, filed a writ petition challenging the rejection of their delayed appeal by the Additional Commissioner (Appeal) of State Tax, Purnea Division, vide order dated 13.03.2023 (Annexure-P/10). The appeal was rejected for being filed beyond the statutory limitation period prescribed under Section 107 of the BGST Act. Section 107 allows three months for filing an appeal, with a further one-month condonation period for delay upon satisfactory explanation. The petitioner's appeal was filed beyond even this extended period. The petitioner sought relief from the High Court under Article 226 of the Constitution of India.

Held

The Court held that while Section 107 of the BGST Act prescribes specific time limits for filing appeals, including a condonation period, the High Court and Appellate Authorities cannot condone delays beyond these statutory periods. However, the Court noted Notification No. 53 of 2023-Central Tax, dated 02.11.2023, which provides a special procedure for filing delayed appeals against orders under Sections 73 and 74 of the BGST Act, with a deadline of 31.01.2024. The Court decided to set aside the impugned order (Annexure-P/10) and restore the appeal to the file of the Appellate Authority, subject to the petitioner satisfying the conditions stipulated in paragraph 3 of the Notification. These conditions include paying the admitted portion of tax, interest, fine, fee, and penalty, and 12.5% of the remaining disputed tax amount (with at least 20% of this 12.5% paid from the Electronic Cash Ledger), by 31.01.2024. If these conditions are met, the appeal will be considered on merits; otherwise, the impugned order will stand restored. The Court specifically mentioned that the petitioner would be entitled to satisfy the 'deficient amounts' required by paragraph 3.

Key Issues

1. Whether the High Court, under Article 226 of the Constitution of India, can condone a delay in filing an appeal beyond the period prescribed in Section 107 of the BGST Act, including the additional one-month condonation period. 2. Whether Notification No. 53 of 2023-Central Tax, dated 02.11.2023, which extends the time for filing appeals against orders passed under Sections 73 and 74 of the BGST Act, can be applied to the petitioner's case, and if so, what are the conditions for availing this extension. Petitioner's Argument: The petitioner likely argued that the Notification provided a special procedure to regularize delayed appeals, and their appeal should be considered under this notification. They would have relied on the spirit of the notification to seek condonation of delay. Revenue's Argument: The revenue authorities would have argued that the appeal was time-barred as per Section 107 of the BGST Act, and the High Court cannot condone delays beyond the statutory limits. They would have emphasized that the Notification's conditions must be strictly adhered to.

Sections Cited

Section 107, Section 73, Section 74

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.1074 of 2024 ====================================================== M/s Narayan Mandal (A Sole Proprietor Ship Firm), Having its Registered Office at- Barari, P.S.- Katihar Sadar, District- Katihar through its legal heir Mr. Ajay Kumar, S/o Late Narayan Mandal, aged about- 33 Years, resident of Market- Barari, P.S.- Katihar Sadar, District- Katihar. ... ... Petitioner/s Versus 1. The Union of India, through the Secretary, Ministry of Finance, Department of Revenue, having its office at Room No.- 46, North Pack, P.O. and P.S. North Block, New Delhi- 110001. 2. The Chief Commissioner, CGST and CX, Office at C.R. Building, 1st Floor, Bir Chand Patel Path, Patna, Bihar. 3. The State of Bihar, through Commissioner BGST, New Secretariat, Patna. 4. Joint Commissioner of State Tax, Katihar Circle Purnea Division, Bihar. 5. Assistant Commissioner of State Tax, Katihar Circle, Purnea Division, Bihar. 6. Additional Commissioner (Appeal) of State Tax, Purnea Division, Purnea. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Anurag Saurav, Advocate For the Respondent/s : Dr. K.N. Singh, ASG Mr. Anshuman Singh, Sr. SC, CGST & CX ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE RAJIV ROY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 22-01-2024 The petitioner is before this Court since he filed a delayed appeal which is said to have been rejected by Annexure-P/10 for reason of the appeal having not been filed within the period of limitation. Section 107 of the BGST Act provides for three months time to file an appeal and a further time of one month in which an appeal could be filed with 2/5 satisfactory explanation, for the delay occasioned.

The appeal filed in the above case, rejected by Annexure-P/10 was beyond even the one month period provided under Section 107 of the BGST Act. This Court and the Hon’ble Supreme Court have held that when there is a specific period provided in the statute, within which period a delayed appeal could be filed; then neither the Appellate Authority nor this Court under Article 226 of the Constitution of India could condone the delay beyond the period provided.

The Central Board of Indirect Taxes and Customs has by Notification No. 53 of 2023- Central Tax, dated 02.11.2023 (S.O. 4767(E)) extended the time for filing appeal against an order passed by the Proper Officer on or before 31.03.2023 under Sections 73 and 74 of the BGST Act. This in fact extends the period for filing a delayed appeal beyond the one month period as provided under Section 107(4) of the BGST Act, on following the special procedure prescribed under the said Notification.

The special procedure prescribed under the Notification is seen from paragraph no. 2 to 6 which are extracted hereunder:-

The said person shall file an appeal against the said order in FORM GST APL-01 in 3/5 accordance with sub-section (1) of Section 107 of the said Act, on or before 31st day of January 2024: Provided that an appeal against the said order filed in accordance with the provisions of section 107 of the said Act, and pending before the Appellate Authority before the issuance of this notification, shall be deemed to have been filed in accordance with this notification, if it fulfills the condition specified at para 3 below.

No appeal shall be filed under this notification, unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to twelve and a half per cent of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed, out of which at least twenty percent should have been paid by debiting from the Electronic Cash Ledger.

No refund shall be granted on account of this notification till the disposal of the appeal, in respect of any amount paid by the appellant, either on their own or on the directions of any authority (or) court, in excess of the amount specified in para 3 of this notification before the issuance of this notification, for filing an appeal under sub- section (1) of Section 107 of the said Act.

No appeal under this notification shall be admissible in respect of a demand not involving tax.

The provisions of Chapter XIII of the Central Goods and Service Tax Rules, 2017 (12 of 2017), shall mutatis mutandis, apply to an appeal filed under this notification.

Hence an appeal against an order under Section 73 4/5 or 74 has to be filed on or before 31.01.2024, and any appeal filed which is pending before the authority could also be considered as properly filed, even if there is delay in such filing.

However, the maintainability of the appeal is further regulated by paragraph no. 3 which require that the admitted tax, interest, fine, fee and penalty arising from the impugned order is paid up along with a sum equal to 12.5% of the remaining amount of tax in dispute arising from the said order subject to a maximum of twenty-five crore rupees; out of which 12.5%, 20% should have been paid by debiting from the Electronic Cash Ledger. The further conditions in paragraph no. 4 to 6 also shall be applicable.

In the present case, the appeal was filed and was dismissed by the first Appellate Authority. In such circumstances, it is only proper that the appeal be restored to the files of the Authority subject to the conditions under paragraph no. 3 being satisfied.

Hence the petitioner would be entitled to satisfy paragraph no. 3 of the aforesaid Notification by paying up the deficient amounts as would be required to maintain the appeal under the notification.

We specifically say the deficient amount, since on 5/5 filing the appeal 10% of the amount of tax in dispute arising from the order impugned would/ought to have been remitted.

10.

We set aside the impugned order dated 13.03.2023 at Annexure-P/10 on condition of the assessee satisfying the aforesaid conditions before the time stipulated in Notification; i.e. 31.01.2024, in which event, the appeal would be taken up and considered on merits. And if the conditions are not satisfied, then necessarily the impugned order would stand restored.

11.

We allow the writ petition on the above terms.

Sudha/PKP (K. Vinod Chandran, CJ) ( Rajiv Roy, J) AFR/NAFR CAV DATE Uploading Date 23.01.2024. Transmission Date

Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.