The Madras High Court has issued an instruction to the SRM Engineering Construction Company Limited, allowing them to submit a statutory appeal, even if it falls outside the specified time limit. This directive comes in response to the company’s argument that a shortage of staff had hindered their ability to monitor the Goods and Services Tax (GST) portal, leading to a delay in challenging the assessment order issued by the GST Authorities.
A Single bench of Justice C. Saravanan, drew upon a decision by the Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited. This decision clarified that “orders cannot be challenged under Article 226 of the Constitution of India beyond the statutory period of limitation for filing appeal.” However, the court decided to consider the writ petition filed by the petitioner company and condoned the 58-day delay in filing the appeal.
The dispute revolves around an assessment order dated 23.02.2023, which followed a notice issued in GST DRC 01 on 19.12.2022. The petitioner, SRM Engineering Construction Company Limited, failed to respond to this notice. Consequently, due to discrepancies between GSTR1 and GSTR 3B, as well as differences in Input Tax Credit (ITC) between GSTR 3B and GSTR 2A, the GST Authorities issued the impugned order.
Normally, the time limit for filing an appeal would have expired on 22.05.2023. With a grace period of an additional 30 days, the final deadline for submitting an appeal would have been 22.06.2023. However, the petitioner did not file a Statutory Appeal with the Appellate Commissioner under Section 107 of the Central GST Act, 2017.
The petitioner explained that their business had been declining, and many of the employees who were active before 2020 had left the company. The company primarily focused on selling completed works, land stock, collecting overdue receivables, and business activities related to group concerns. As a result, the company’s new and limited staff did not frequently access the GST portal to check the “notices and orders” section. Consequently, they did not notice the upload of GST DRC – 01 dated 19.12.2022 and the subsequent impugned order dated 23.02.2023 on the GST portal.
The petitioner only became aware of the demand against them when they manually received a recovery notice dated 24.07.2023. In response, the petitioner company promptly filed a representation on 27.07.2023, which was acknowledged by the respondent. In this representation, the petitioner company provided a detailed explanation that there were no discrepancies in turnovers between GSTR 1 and 3B, and any differences in ITC between GSTR 3B and 2A had been paid by the company. However, the respondent did not consider this representation and issued an urgent notice dated 03.08.2023, which the petitioner received on 07.08.2023.
Considering all these circumstances, the court has decided to condone the delay in filing the appeal. The petitioner has been directed to file a Statutory Appeal within 30 days from the date of receiving a copy of the court’s order. The Appellate Commissioner will be responsible for numbering the appeal and adjudicating it on its merits. Additionally, the court emphasized that the petitioner must pre-deposit the required amount in accordance with Section 107 of the GST Act, 2017, before any order is passed, and the petitioner will have the opportunity to be heard in this regard.
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