Tvl. Sankaranthi And Co. vs. The Appellate Deputy Commissioner (St)

Facts

The petitioner, Tvl. Sankaranthi and Co., filed a writ petition challenging an order dated 10.03.2025 passed by the Appellate Deputy Commissioner (ST). The impugned order rejected the petitioner's appeal against an assessment order dated 15.03.2024. The rejection was based on the ground that the appeal was filed beyond the condonable period of limitation prescribed under Sections 107(1) and 107(4) of the Tamil Nadu Goods and Services Tax Act, 2017. The appeal was filed more than 25 days beyond the condonable period. The petitioner had paid the disputed tax prior to the impugned order. The surviving issue concerned the imposition of penalty under Section 74 and interest under Section 50.

Held

The Court held that while the Appellate Deputy Commissioner was correct in noting that the appeal was filed beyond the condonable period of limitation, the impugned order should be set aside to the extent it rejected the appeal on this ground. The Court reasoned that the petitioner had already paid the disputed tax, and the remaining issues for adjudication were penalty under Section 74 and interest under Section 50. Relying on the Supreme Court decisions cited by the respondents, the Court acknowledged the strictness of limitation periods. However, considering the payment of tax and the nature of the remaining dispute, the Court decided to remit the matter back to the first respondent. The ratio decidendi is that where the primary tax liability has been discharged, and the appeal primarily concerns penalty and interest, a strict application of limitation for filing the appeal might be revisited, especially when remitting for fresh consideration on merits. The operative direction was to set aside the impugned order to the extent of rejection on limitation and to remit the case back to the first respondent for fresh orders on merits, without reference to limitation, and to endeavor to pass final orders expeditiously, preferably within six months.

Key Issues

1. Whether the Appellate Deputy Commissioner (ST) erred in rejecting the petitioner's appeal solely on the grounds of limitation, considering that the disputed tax had already been paid and the remaining issues pertained to penalty and interest? (Mixed question of law and fact, concerning Section 107 of the Tamil Nadu Goods and Services Tax Act, 2017). Petitioner's Contention: The petitioner argued that the appeal should not have been rejected on limitation grounds, especially since the tax demand was already settled and the core dispute revolved around penalty and interest. Revenue's Contention: The respondents (Appellate Deputy Commissioner and State Tax Officer) contended that the appeal was indeed filed beyond the condonable period of limitation as stipulated under Sections 107(1) and 107(4) of the Act, and therefore, the rejection was justified. The respondents relied on the Supreme Court decisions in Singh Enterprises Vs CCE and CCE and Customs Vs. Hongo India (P) Limited.