M/S. Vinod Agarwal vs. Union Of INDIA
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The petitioner, M/s. Vinod Agarwal, filed a writ petition challenging an order dated 11.03.2024 by the Joint Commissioner (Appeal), State Tax, which dismissed his appeal against an order dated 16.08.2021 passed by the Assistant Commissioner, State Tax. The dismissal was based on the ground that the appeal was filed beyond the limitation period. The petitioner had received notices regarding a mismatch in GSTR-2A and GSTR-3B amounts, leading to demands for tax, interest, and penalty. The Assistant Commissioner passed an order demanding a total of Rs. 1,61,021/-. The petitioner filed an online appeal on 30.09.2021, which was dismissed by the appellate authority for being filed 838 days late, citing Section 107(1) and 107(4) of the CGST Act, 2017.
Held
The Court held that the dismissal of the petitioner's appeal by the appellate authority on the ground of delay was not justified. The Court referred to Rule 108(3) of the CGST Rules, 2017, which initially required submission of a certified copy of the order within seven days of filing the appeal. However, the Court noted an amendment to Rule 108(3) notified on 26.12.2022. This amendment clarified that if the decision or order appealed against is uploaded on the common portal, the date of issue of the provisional acknowledgment shall be considered the date of filing the appeal. The Court found this amendment to be clarificatory in nature and having retrospective effect. Citing decisions from the Gujarat High Court and Karnataka High Court, the Court concluded that since the amendment was in force when the appellate authority passed its order, the rejection of the appeal on grounds of delay was incorrect. Consequently, the impugned order of the appellate authority was quashed, and the matter was remitted back to the appellate authority for a fresh decision on merits after providing the petitioner an opportunity of hearing. The Court explicitly stated it had not expressed any opinion on the merits of the case.
Key Issues
1. Whether the appeal filed by the petitioner was rightly dismissed by the appellate authority on the ground of limitation, considering the provisions of Rule 108(3) of the CGST Rules, 2017 and subsequent amendments. Petitioner's contention: The petitioner argued that his appeal was filed online within time on 30.09.2021. He contended that a notification dated 26.12.2022, issued by the Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs), relaxed the requirement of submitting a hard copy of the impugned order within 7 days. Therefore, dismissing the appeal on the technical ground of not submitting a hard copy was erroneous, as the online filing and the availability of the order on the official website should suffice. Revenue's contention: The respondents argued that Rule 108 of the CGST Rules clearly mandates the submission of a certified copy along with the appeal, which the petitioner failed to annex. They asserted that the appellate authority correctly applied the legal provisions and thus the writ petition should be dismissed.
Sections Cited
Section 107, Section 74, Rule 108, Rule 142
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Cause title — parties, addresses and appearances
Order
on Board
2024
The present petition has been filed by the petitioner against the impugned order dated 11.03.2024 (Annexure P/1) passed by the respondent No.2 arising out of the order dated 16.08.2021 (Annexure P/2) passed by the respondent No.3 whereby the respondent No.2 has dismissed the appeal filed by the petitioner under Section 107 of the Central Goods and Service Tax Act, 2017 (in short, the Act, 2017) on INDRAJEET SAHU Date: 2024.09.27 17:23:24 +0530
2 / 6 the ground that the appeal has not been filed within the limitation period.
Brief facts of the case are that, the petitioner is a proprietor of M/s Vinod Agarwal who was allotted various works from the government contract by the authority. He filed his return-1 and 3B as per the law for the period of 01.04.2019 to 31.03.2020. On 24.11.2020 the respondent authorities have issued notice under Rule-1A of Rule 142 of the CGST Rules in TRC-01A stating therein that there is mismatch of the amount in between GSTR-2A and GSTR-3A of Rs.67,092/- and fixed the interest of Rs.16,102.08/- and penalty of Rs.67,092/-. On 07.03.2020 the petitioner was demanded the details of the assessment but instead of replying the request made by the petitioner, another notice in the Form of DRC-1A dated 11.12.2020 has been served upon him which was duly replied by the petitioner on 16.12.2020. 3. On 18.01.2021, the petitioner again received a notice under Section 74(1) of the Act, 2017 in the Form of DRC-01 with respect to mismatch of amount in GSTR-2A and GSTR-3B. The petitioner again submitted his representation on 28.02.2021, but instead of considering the representation of the petitioner, the respondent have authorities sent a demand notice on 22.06.2021 demanding total penalty of Rs.1,29,734/-. On 16.08.2021, the respondent No.3 has passed the order and directed the petitioner to pay an amount of tax of Rs.67,092/-, interest Rs.26,837/- and penalty Rs.67092/- i.e. total amount of Rs.1,61,021/-.
The petitioner preferred an appeal against the order dated 16.08.2021 before the respondent No.2 through online mode on 30.09.2021. After hearing the parties, the respondent No.2 dismissed the appeal filed by 3 / 6 the petitioner on 11.03.2024 on the ground that the appeal is filed after 838 days of its limitation and as per Section 107(1) and 107(4) of Act, 2017, the appeal cannot be entertained after its limitation period.
Learned counsel for the petitioner would submit that the order dated 16.08.2021 has been challenged by the petitioner by filing appeal through online mode on 30.09.2021 which was well within time. At the time of hearing of appeal, the provisions for submitting the hard copy of impugned order within 7 days was already relaxed vide notification dated 26.12.2022 issued by the Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs), Govt. of India. Therefore, dismissal of his appeal on technical ground that hard copy of impugned order was filed along with appeal is erroneous. The appellate authority should have considered the appeal well within time as the same has been filed through online mode and the order impugned has also been uploaded in the official website of the department which should have taken as the correct and authentic copy of the impugned order and there was no necessity to file certified copy of the same. Therefore, he prayed for setting aside of the impugned order and his appeal may be heard on its merits by the appellate authority.
On the other hand the counsel for the respondents opposes the submissions made by the counsel for the petitioner and would submit that Rule 108 of the CGST Rules clearly provides submission of certified copy along with appeal, but the petitioner has not annexed the certified copy of the impugned order along with appeal. Thus, the appellate authority has rightly considered the legal provisions of the 4 / 6 CGST Act and Rules and therefore the writ petition filed by the petitioner is liable to be dismissed.
I have heard learned counsel for the parties and perused the documents annexed with the writ petition.
The provisions of filing appeal is provided under Rule 108 of the CGST Rules, 2017. The relevant part of the Rules is reproduced herein for consideration of the present case which reads as under: “Rule 108 - Appeal to the Appellate Authority- (1) An appeal to the Appellate Authority under sub-section (1) of section 107 shall be filed in FORM GST APL-01, along with the relevant documents, either electronically or otherwise as may be notified by the Commissioner, and a provisional acknowledgment shall be issued to the appellant immediately. (2) The grounds of appeal and the form of verification as contained in FORM GST APL- 01 shall be signed in the manner specified in rule
(3) A certified copy of the decision or order appealed against shall be submitted within seven days of filing the appeal under sub-rule (1) and a final acknowledgement, indicating appeal number shall be issued thereafter in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf: Provided that where the certified copy of the decision or order is submitted within seven days from the date of filing the FORM GST APL-01, the date of filing of the appeal shall be the date of the issue of the provisional acknowledgment and where the said copy is submitted after seven days, the date of filing of the appeal shall be the date of the submission of such copy.”
From perusal of Rule-3, it is quite vivid that the petitioner is required to submit copy of the impugned order against which the appeal is preferred within 7 days of filing of appeal under Sub-rule (1) and then final acknowledgment indicating appeal number is to be issued in Form GST APL-02 by the appellate authority. Therefore, while applying Rule 108(3) by the appellate authority, dismissal of the appeal on the ground of delay appears to be justified. However, there is an amendment in Rule 108 (3) of Rules, 2017 which is notified on 26.12.2022, which reads as under:
5 / 6 “13. In the said rules, in rule 108, for sub-rule(3), the following sub-rule shall be substituted namely- (3) Where the decision or order appealed against is uploaded on the common portal, a final acknowledgment indicating appeal number, shall be issued in Form GST APL-02 by the appellate authority or an officer authorized by him in this behalf and the date of issue of the provisional acknowledgment shall be considered as the date of filing of appeal.”
Perusal of amendment notified on 26.12.2022 would reveal that it is clarificatory in nature which came in to force w.e.f. 26.12.2022. Since amendment is clarificatory in nature, it would have a retrospective effect. The retrospective effect of Rule 108(3) of the Rules, 2017 has also been considered by the Gujrat High Court in Otsuka Pharmaceuticals India Pvt. Ltd. Vs. Union of India in R/Special Civil application No.13209, 132010, 13212,13213 and 13215 of 2023 vide its order dated 27.03.2024 and also by the Karnataka High Court in the matter of M/s Hitachi Energy India Pvt. Ltd. and another Vs. State of Karnataka and Others in Writ Petition No.14881 of 2024 (T-RES) vide order dated 19.06.2024. 11. Since on the date of passing of the order dated 11.03.2024, the notification already came into force from 26.12.2022 and it is found that it is clarificatory in nature with retrospective effect on the provisions of Rule 108(3) of the Rules, 2017, the impugned order passed by the appellate authority rejecting the appeal filed by the petitioner on the ground of delay was not justified.
The impugned order dated 11.03.2024 is accordingly quashed and set aside and the matter is remitted back to the appellate authority to pass a afresh order on merits after giving proper opportunity of hearing to the petitioner.
6 / 6
It is made clear that this court has not expressed any opinion on the merits of the case and the same may be decided by the appellate authority within three months from the date of receipt of copy of this order after giving proper opportunity of hearing to the petitioner in accordance with law.
The writ petition accordingly stands allowed and disposed of. (Ravindra Kumar Agrawal) Judge inder
Reproduced from the public record of the Chhattisgarh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.