M/S.Jaya Medicals Agencies vs. The Appellate Authority

Facts

The petitioner, M/s. Jaya Medicals Agencies, filed a writ petition challenging an assessment order dated 22.08.2024, passed by the second respondent (State Tax Officer) for the year 2019-2020. The petitioner claimed to be unaware of this order. Upon learning of it, they filed a rectification application on 28.01.2025, which was rejected by the second respondent on 31.01.2025. Subsequently, the petitioner filed an appeal before the first respondent (Appellate Authority), but it was rejected on the grounds of limitation. The petitioner's primary grievance was that the original assessment order was passed without proper notice and details of the demand. The petitioner argued that the limitation period for appeal should be calculated from the date of the rejection of the rectification application, not the original assessment order.

Held

The Court held that the period of limitation for filing an appeal against an original assessment order should be calculated from the date of the rejection of the rectification application, not from the date of the original assessment order itself. The Court reasoned that when a rectification application is filed under Section 161 of the GST Act, and it is subsequently rejected, the period of limitation to challenge the original assessment order should commence from the date of the rejection of the rectification application. This is because the rectification proceedings effectively extend the period during which the assessee can seek redressal against the original order. The Court found that the first respondent (Appellate Authority) had erroneously calculated the limitation period from the date of the original assessment order (22.08.2024) instead of the date of the rejection of the rectification application (31.01.2025). Consequently, the rejection order passed by the first respondent on 05.03.2025 was set aside. The Court directed the first respondent to accept the appeal on file, disregarding the limitation period, and to decide the appeal on its merits after providing the petitioner an opportunity of hearing, within four months.

Key Issues

1. Whether the period of limitation for filing an appeal against an original assessment order, after the dismissal of a rectification application filed under Section 161 of the GST Act, should be calculated from the date of the original assessment order or the date of the rejection of the rectification application? Petitioner's Arguments: The petitioner contended that the original assessment order dated 22.08.2024 was passed without proper notice. They further argued that after filing a rectification application under Section 161 of the GST Act, which was rejected on 31.01.2025, the limitation period for challenging the original assessment order should commence from the date of the rejection of the rectification application. They relied on the principle that a rectification order, if passed, merges with the original order, and thus, the period of limitation for challenging the original order cannot begin before the disposal of the rectification proceedings. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents.