M/S Times Projects vs. State Tax Inspector, Ghatak 1, Ahmedabad, Division 1

Held

The Court held that the Appellate Authority erred in mechanically disposing of the appeal on the ground of delay without considering the prevailing circumstances, particularly the COVID-19 pandemic. The Court noted that Section 107(4) of the GST Act empowers the Appellate Authority to condone delays if sufficient cause is shown. The Court found the petitioner's explanation for the delay, including the fact that the notice was sent to the Chartered Accountant's email and the onset of the pandemic, to be plausible. The Court also considered the Supreme Court's orders regarding the period of the pandemic and the need to extend timelines. The Court determined that the petitioner's date of knowledge of the proceedings was 06.09.2022, when their bank account was attached. Considering this date of knowledge and the unprecedented circumstances of the pandemic, the Court found that the delay deserved to be condoned. The Court quashed the order dated 28.09.2022, restored the appeal to the file of the First Appellate Authority, and directed it to hear the appeal on merits.

Facts

The petitioner, M/s Times Projects, filed a writ petition challenging an order dated 28.09.2022 passed by the Deputy State Tax Commissioner, Appeal -1, Ahmedabad, under Section 107 of the Gujarat Goods and Services Tax Act, 2017. The petitioner's GST return was selected for scrutiny under Section 61. A discrepancy was found, and a notice was sent to the petitioner's Chartered Accountant via email. The petitioner claims to have been unaware of this notice and a subsequent demand of Rs. 72,92,765/- raised under Section 73(5) due to the pandemic. The petitioner also claims to have been unaware of the appeal proceedings before the First Appellate Authority. Their bank account was attached on 06.09.2022. The petitioner filed an appeal on 17.09.2022, paying a 10% pre-deposit. The Appellate Authority rejected the appeal as being filed beyond the period of limitation.

Key Issues

1. Whether the Appellate Authority erred in rejecting the petitioner's appeal solely on the grounds of delay, without considering the impact of the COVID-19 pandemic and the petitioner's alleged lack of knowledge of the proceedings, thereby violating principles of natural justice, as contemplated under Section 107(4) of the Gujarat Goods and Services Tax Act, 2017? Petitioner's Arguments: The petitioner argued that they were unaware of the initial proceedings due to the pandemic and the notice being sent to their Chartered Accountant's email. They contended that the demand raised was ex-parte and they were unaware of the appeal filing deadline. They submitted that their bank account was attached on 06.09.2022, which was their first knowledge of the issue, and they promptly filed an appeal thereafter. They relied on the principle that appellate authorities should lean towards providing a fair opportunity of hearing, especially when dealing with condonation of delay, citing the Supreme Court's stance in Union of India v. Jesus Sales Corporation and this Court's decision in Aggarwal Dyeing and Printing Works v. State of Gujarat. Revenue's Arguments: No specific arguments were recorded for the respondent revenue.