Mcl-Bel Bihar (Jv) vs. The State Of Bihar

Held

The Court held that the impugned order of the appellate authority, which rejected the petitioner's appeal as time-barred, could not be sustained. The Court found the appellate authority's calculation of the limitation period to be erroneous. The Court reasoned that when an application for rectification of an order under Section 161 of the GST Act is filed due to apparent errors, and this application is subsequently rejected, the period of limitation for filing an appeal against the original order should be considered from the date of the rejection of the rectification application. The petitioner had filed the rectification application promptly and then filed the appeal within a short period after its rejection. Therefore, the appeal filed on 07.01.2025 was considered to be within the period of limitation. The Court set aside the appellate order dated 31.03.2025 and remanded the matter back to the appellate authority to decide the appeal on its merits, without considering the delay, after providing an opportunity of hearing to the petitioner.

Facts

The petitioner, MCL-BEL BIHAR (JV), is challenging an order dated 31.03.2025 by the Additional Commissioner of State Tax (Appeal), Patna, which rejected their appeal as time-barred. The dispute originated from a notice in Form ASMT-10 issued on 15.03.2024 regarding a mismatch of Input Tax Credit (ITC) of Rs. 70,16,520/- for the financial year 2019-20. The petitioner filed a reply, followed by a reply to a show cause notice (Form DRC-01) issued under Section 73 of the GST Act. An adjudication order (Form DRC-07) was passed on 30.07.2024. The petitioner filed a rectification application under Section 161 of the Act on 16.10.2024, alleging errors in the adjudication order. This application was rejected via email on 24.12.2024. Subsequently, the petitioner filed an appeal before the appellate authority on 07.01.2025, which was dismissed on 31.03.2025 for being time-barred.

Key Issues

1. Whether the appeal filed by the petitioner before the appellate authority on 07.01.2025 was within the prescribed period of limitation under Section 107 of the GST Act, considering the prior filing and rejection of a rectification application under Section 161 of the Act. Petitioner's contentions: The petitioner argued that the clock for filing the appeal should start ticking from the date of rejection of the rectification application on 24.12.2024. They contended that the appeal was filed within 13 days of this rejection, which falls within the extended period of limitation. They asserted that the appellate authority's calculation of limitation from the original adjudication order dated 30.07.2024 was erroneous, especially since the rectification application was filed promptly after discovering apparent errors. They relied on the principle that the period of limitation for appeal is extended by the pendency of a rectification application. Revenue's contentions: The State argued that the appeal was filed against the original adjudication order dated 30.07.2024. Calculating the limitation from this date, the appeal was found to be time-barred, having been filed after 120 plus 39 days.