M/S Molana Construction Company vs. Central Goods And Service Tax Department

Held

The Court held that while statutory provisions of limitation under Section 107 of the CGST Act, 2017, bind statutory authorities, these limitations do not apply in writ proceedings under Article 226 of the Constitution of India. The Court reasoned that powers under Article 226 are founded on justice, equity, and good conscience and are exercised for public good. The legislative intent of the CGST Act is to facilitate commercial and business activities, and the right to appeal should not be frustrated on mere technicalities. The Court distinguished the cited case of "Ashok Varandan" as pertaining to different issues. It noted that the Supreme Court in "Glaxo Smith Kline Consumer Health Care Limited" acknowledged ample powers to condone delay in preferring an appeal, implying that the writ court's power is not strictly bound by the statutory limitations of the appellate authority. Therefore, the Court found it inclined to entertain the writ petition. The order dated June 13, 2024, passed by the Joint Commissioner of CGST was quashed, and the statutory appeal was restored to its original file, subject to the petitioner depositing late fee, penalty, and other statutory deposits for entertaining the appeal. The issue of whether the Limitation Act, 1963, is implicitly excluded by the CGST Act was not directly decided in terms of the appellate authority's power, but the writ court's power to intervene was affirmed.

Facts

M/s Molana Construction Company (the petitioner) filed a writ petition challenging an order dated June 13, 2024, passed by the Joint Commissioner of Central Goods and Service Tax (CGST) at Jodhpur. The Joint Commissioner dismissed the petitioner's appeal as barred by limitation. The Joint Commissioner relied on Section 107 of the CGST Act, 2017, and Circular No. 148/04/2021-GST dated May 18, 2021, to hold that an appeal filed beyond three months, with a possible one-month extension, could not be entertained. The Joint Commissioner also referred to the Kerala High Court's decision in "Plenuel Nexus Private Ltd. Vs. Additional Commissioner Headquarter" and concluded that the CGST Act is a self-contained code implicitly excluding the Limitation Act, 1963. Consequently, the appeal was dismissed on limitation without considering its merits.

Key Issues

1. Whether the appellate authority under Section 107 of the CGST Act, 2017, has the power to condone delay in filing an appeal beyond the period prescribed, including the extended period of one month? 2. Whether the provisions of the Limitation Act, 1963, are implicitly excluded by the CGST Act, 2017, rendering the appellate authority powerless to condone delays beyond the statutory limit? Petitioner's Arguments: The petitioner contended that the right to appeal provided under the statute must be decided on merits, irrespective of delays or laches by the assessee. They argued that the legislative intent behind the CGST Act, particularly Section 30, is to facilitate business activities, and provisions like Section 107 should not be frustrated by mere technicalities. The petitioner implicitly argued that the writ jurisdiction under Article 226 of the Constitution of India is a broader remedy that can be invoked even if statutory remedies are time-barred, especially when the dismissal is on a technicality. Respondent's Arguments: The respondent (Revenue) argued that Section 107 of the CGST Act, 2017, provides an express bar of limitation, and the appellate authority has no power to condone delay beyond the prescribed period. They relied on this Court's decision in D.B. Civil Writ No. 2430/2024, "Ashok Varandan Vs. Central Board of Indirect Taxes and Customs & Ors.," and the Supreme Court's observation in "Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs. Glaxo Smith Kline Consumer Health Care Limited" that a writ petition should not be entertained if the alternative remedy of statutory appeal was not availed within the extended period.