The condonation application for delay in filing a Goods and Services Tax ( GST ) appeal was rejected by the Allahabad High Court. The bench referred to the precedent where it was ruled that the Section 107 of the GST Act is a complete code and it excludes the general limitation provisions like Section 5 of the Limitation Act.
Justice Piyush Agarwal noted the observation in the case of M/s Yadav Steels where it was observed that “Taxing statutes like the GST Act embody a comprehensive framework with specific limitation provisions tailored to expedite the resolution of tax-related matters. Section 107 of the GST Act, operates as a complete code in itself, explicitly delineating limitation periods for filing appeals and implicitly excluding the application of general limitation provisions such as Section 5 of the Limitation Act.”
The petitioner, a registered GST dealer, argued that the original tax demand order under Section 74 of the GST Act was issued without providing a hearing, violating Section 75(4) of the Act. He also claimed that the authorities had failed to observe any willful intent to evade taxes, which is a mandatory requirement under Section 74.
Relying on a recent judgment of the court (M/s Sumit Enterprises v. State of U.P.), the petitioner sought relaxation on filing the appeal, referencing a notification from November 2023 that allowed appeals beyond the prescribed time under certain circumstances if filed before January 2024.
The Court rejected the petitioner’s argument, stating that his case did not fall within the scope of the relaxation provided by the notification. Upon careful examination of the notification, it was clarified that appeals against orders passed under Sections 73 or 74 of the GST Act, issued on or before March 31, 2023, could be considered on merit if filed by January 31, 2024, without invoking the limitation period. However, in this case, the impugned order was passed on July 20, 2023, well after the March 31, 2023, cutoff date. As a result, the notification offered no relief to the petitioner.
Know When to Say No to Cash Transactions, Click Here
Furthermore, the Sumit Enterprises case, cited by the petitioner, did not address the issue of delay condonation in appeal filing, rendering it irrelevant to the current case.
The respondent’s counsel supported the dismissal, contending that the appeal was filed beyond the limitation period outlined in Section 107, which allows only a three-month window for appeals, with an additional one-month extension at the appellate authority’s discretion.
The court relied on multiple precedents, including M/s Yadav Steels and M/s Garg Enterprises, to assert that the GST Act operates as a “complete code” and does not allow for the application of Section 5 of the Limitation Act, which permits condonation of delays beyond statutory periods in general cases.
The court highlighted the important part in the M/s Yadav Steels case that “Section 107 of the GST Act prescribes a specific limitation period within which appeals against certain decisions must be filed. This limitation period is integral to the functioning of the appellate mechanism under the GST Act and reflects the legislative intent to expedite the resolution of tax disputes. By imposing a time limit on the filling of appeals, Section 107 aims to prevent undue delayed in the adjudication process and promote the efficient administration of the GST regime. On the other hand, Section 5 of the Limitation Act provides for the extension of prescribed periods in certain exceptional circumstances, such as when sufficient cause is shown for the delay.”
The High Court stated that in cases involving special statutes like the GST Act, the provisions of the special law take precedence over general laws.
As highlighted in the Yadav Steel judgment, the importance of limitation periods in tax statutes, such as the GST Act, cannot be overstated. These statutes are crucial for the efficient collection of taxes, which are essential for the functioning of the state. Limitation provisions ensure the timely resolution of disputes, promoting efficiency and fairness in tax administration.
Know When to Say No to Cash Transactions, Click Here
The writ petition which challenged the dismissal of appeal on grounds of limitation was dismissed again by the high court. Taking M/s Yadav Steels as precedent, the court refuses to condone the delay in filing the GST appeal and dismissed the petition.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
