M/S Simla Gomti Pan Products PVT. LTD. Thru. Director Megh Raj Singh vs. Commissioner Of State Tax U.P. Lko. And 2 Others
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The petitioner, M/s Simla Gomti Pan Products Pvt. Ltd., challenged orders dated 11.11.2024 and 23.11.2024, which dismissed their appeals under the GST Act as time-barred. These appeals were filed against an ex-parte order dated 12.06.2024 passed under Section 74 of the GST Act by respondent no. 3, allegedly without granting an opportunity of hearing or providing relied-upon documents like the SIB report. The petitioner had previously filed a writ petition (Writ Tax No. 220 of 2024) which was disposed of on 04.09.2024, directing consideration of their reply and provision of the SIB report. An SLP filed against this order was dismissed by the Supreme Court on 04.11.2024. Subsequently, the petitioner filed a regular appeal under Section 107 of the GST Act on 06.11.2024, which was dismissed for being beyond limitation and for non-deposit of the mandatory 10% pre-deposit.
Held
The Court held that the impugned orders dated 11.11.2024 and 23.11.2024 were improper as they failed to consider the mandatory prescriptions contained in Section 14 of the Limitation Act. The Court found that the petitioner was bona fide pursuing their remedies before the High Court and the Supreme Court, and the time spent in these proceedings could be excused under Section 14 of the Limitation Act. This aspect was not considered in the impugned orders. Therefore, the orders were quashed. The matter was remanded to the appellate authority to pass fresh orders after considering the mandate of M.P. Steel Corporation and Suryachakra Power Corporation Limited. The appellate authority was directed to pass the order within three weeks, and the petitioner was at liberty to place any other relevant documents or case-laws. The Court expressly left undecided the arguments regarding the arbitrariness of the Section 74 order and the non-provision of the SIB report, as the primary ground for allowing the petition was the failure to consider Section 14 of the Limitation Act.
Key Issues
1. Whether the appeals filed by the petitioner under Section 107 of the GST Act were beyond limitation, and if so, whether the delay could be condoned, considering the petitioner's bona fide pursuit of remedies before this Court and the Supreme Court, thereby invoking the principles of Section 14 of the Limitation Act? Petitioner's arguments: The petitioner contended that they were bona fide pursuing their remedies by filing a writ petition before the High Court and an SLP before the Supreme Court. Therefore, they were entitled to the benefit of Section 14 of the Limitation Act, as held in M.P. Steel Corporation vs. Commissioner of Central Excise. They also argued that the Section 74 order was arbitrary as it lacked allegations justifying the invocation of the larger period of limitation and that the SIB report was never provided. Respondent's arguments: The Standing Counsel argued that the SIB report was to be collected by the assessee, which they did not do. They further argued that the petitioner was to blame for not being vigilant in pursuing remedies after the High Court's order and that the impugned orders were silent on the applicability of Section 14 of the Limitation Act.
Sections Cited
Section 74, Section 107, Section 73
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Cause title — parties, addresses and appearances
dismissed by means of the impugned judgment.
In the said order, it was also observed that the petitioner has not deposited the mandatory requirement of 10% of pre-deposit
and it was also noticed that the appeal was beyond limitation and the delay could not be condoned. The Tribunal also noticed the order of this Court in the case of M/s A V Construction vs. Commissioner and Ors.; Writ Tax No.819 of 2021 decided on 30.09.2021 wherein it was held that the principles of Section 5 of Limitation Act would have no application in the face of law which is a complete code and apart from the quantum of delay which can be condoned as prescribed under Section 107 of GST Act, the Tribunal did not have the power to invoke the principles of Section 5 of the Limitation Act to condone the delay.
In the light of the said, learned counsel for the petitioner argues that the petitioner was bonafidely pursuing his remedies against the assessment order, firstly by filing a writ petition before this Court and secondly by availing the remedy of SLP before the Hon'ble Supreme Court, and thus, the petitioner was entitled to the benefit of Section 14 of the Limitation Act as has been held in the case of M.P. Steel Corporation vs. Commissioner of Central Excise; (2015) 7 SCC 58. He further argues that the order under Section 74 of the GST Act is wholly arbitrary for the reasons that in the show-cause notice, there was no assertion/allegation that there exist any material so as to justify invoking of larger period of limitation under Section 74. He argues that to invoke the juri iction under Section 74, in contradiction to the powers conferred by Section 73, it is essential that power under Section 74 can only be invoked when tax is not paid or short paid by reasons of fraud or any wilful misstatement or suppression of facts. He argues that there were no allegation, leave alone finding, in the impugned order to justify invocation of power under Section 74 of the GST Act. He further argues that even the documents proposed to be relied upon being the SIB report, was never provided and thus, for all the reasons, the impugned orders deserve to be quashed.
Learned Standing Counsel, based upon instructions and counter affidavit, argues that the SIB report was directed to be collected by the assessee, however, he did not do so. It is further argued that the petitioner has already approached this Court by filing a writ petition which has been disposed off, thus, the validity of the order of assessment cannot be seen again in a subsequent writ petition. He further argues that the petitioner was granted ten days' time by this Court to file and avail the remedy of appeal which he chose not to do so and thus, it is the petitioner who is to be blamed for him not being vigilant in pursuing the remedies prescribed under law, as such, the writ petition should be dismissed.
As regards the argument with regard to the applicability of Section 14 of the Limitation Act, it is argued that the order is silent on that aspect.
Considering the submissions made at the Bar, prima-facie, the petitioner was bonafidely pursuing his remedy before this Court as well as before the Supreme Court as is evident from the two orders passed, and immediately after passing of the order by the Supreme Court on 04.11.2024, the petitioner preferred the appeals on 06.11.2024. The period of the petitioner having spent before the High Court and the Supreme Court could be pleaded by him to be excused in view of the mandate of Section 14 of the Limitation Act. This aspect has not been considered in the impugned orders.
Thus, finding the impugned orders dated 11.11.2024 & 23.11.2024 to be improper insofar as it fails to consider the Engineer, Port Blair and Ors.; (2016) 16 SCC 152. 13. The said order shall be passed by the appellate authority within a period of three weeks.
The petitioner would be at liberty to place any other relevant documents/case-laws that he may think appropriate before the appellate authority.
Present petition stands allowed in above terms. Order Date :- 10.4.2025 nishant NISHANT MOHAN High Court of Judicature at Allahabad, Lucknow Bench
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.