Banka Constructions vs. State Of Chhattisgarh

Facts

The petitioner, Banka Constructions, is challenging orders passed by the Assistant Commissioner (dated 03.07.2019) and the Joint Commissioner (dated 24.09.2021). The Assistant Commissioner imposed a tax liability of Rs. 14,24,000/-, interest of Rs. 73,336/-, and penalty of Rs. 1,42,000/- for the period October 2018 to December 2018, citing non-appearance of the petitioner on multiple hearing dates. The petitioner claims the order was not uploaded and they only obtained it on 27.07.2021. They filed an appeal before the Joint Commissioner on 07.09.2021, which was dismissed for being filed beyond the prescribed limitation period. The petitioner's bank account was frozen, leading to their knowledge of the order. The petitioner contends they showed sufficient cause for the delay, but it was not considered.

Held

The Court held that the appeal was preferred by the petitioner under Section 107(1) of the CGST Act, 2017, after an expiry of approximately two years from the date of the order (03.07.2019) to the date of filing the appeal (07.09.2021). Section 107(1) mandates appeals to be filed within three months from the communication of the order. Section 107(4) allows for an extension of a further period of one month if sufficient cause is shown. The Court noted that the petitioner's delay was substantial (two years) and was not properly explained. Relying on the Division Bench judgment in Nandan Steels and Power Limited, the Court observed that the Legislature has not provided any specific time limit for entertaining an appeal after the expiry of the period of limitation if sufficient cause is shown, but the legislative intent was not to apply the Limitation Act in proceedings under the CGST Act. In the present case, the delay was significant and not adequately explained, leading to the dismissal of the appeal by the appellate authority. The Court found no good ground to interfere with the appellate authority's order.

Key Issues

1. Whether the appellate authority erred in dismissing the petitioner's appeal solely on the ground of limitation, despite the petitioner claiming to have shown sufficient cause for the delay in filing the appeal, as contemplated under Section 107(4) of the CGST Act, 2017? The petitioner argued that the order dated 03.07.2019 was not uploaded by the department, and they obtained the original order on 27.07.2021, subsequently filing the appeal on 07.09.2021, which they contended was within the period of limitation from the date of knowledge. They asserted that their bank account being frozen led to their awareness of the order and that sufficient cause for the delay was presented to the appellate authority but not considered. They relied on the judgment in M/s. Sri Mutharamman Traders vs. The State Tax Officer. The respondent argued that notices were issued and served, but the petitioner failed to appear. They contended that the original order was passed on 03.07.2019 and communicated through the portal on the same date. The appeal was filed on 07.09.2021, approximately two years after the order, which was beyond the prescribed limitation period. They further argued that the appellate authority under the Act of 2017 does not have the power to condone delay beyond 30 days beyond the initial 90 days, and the appeal was preferred after two years, thus the appellate authority rightly dismissed it. They relied on Nandan Steels and Power Limited vs. State of Chhattisgarh.