GST Appeal Dismissed as Time-Barred, Court Upholds Strict Limitation Period Under CGST Act.

Case Name:

Writ Tax No. 1394 of 2023 - M/S Abhishek Trading Corporation v. Commissioner (Appeals) And Another

Key Takeaways:

- The court affirmed the strict application of the limitation period under Section 107 of the CGST Act. - The Limitation Act, 1963, cannot be invoked to condone delays beyond the prescribed period under the CGST Act. - The CGST Act is a self-contained code, and the appellate authorities do not have the power to condone delays beyond the statutory limit. **Issue:** Whether the appellate authority under the CGST Act has the power to condone delays in filing appeals beyond the prescribed limitation period by applying the provisions of the Limitation Act, 1963. **Facts:** The petitioner's appeal against an order canceling their GST registration was dismissed by the Commissioner (Appeals), CGST, as it was filed after a delay of more than 20 months, well beyond the four-month limitation period prescribed under Section 107 of the CGST Act. The petitioner challenged this order before the High Court. **Arguments:** The petitioner likely argued that the delay should be condoned by applying the provisions of the Limitation Act, 1963, which allows for condonation of delays in certain circumstances. The respondents, on the other hand, contended that the CGST Act is a self-contained code, and the Limitation Act does not apply to the limitation period prescribed under Section 107. **Key Legal Precedents:** The court relied on the Supreme Court's decisions in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur and Others [(2008) 3 SCC 70] and Commissioner of Customs and Central Excise v. Hongo India Private Limited and Another [(2009) 5 SCC 791], which held that the appellate authorities under the Central Excise Act (a similar statute) do not have the power to condone delays beyond the statutory limit, and the Limitation Act, 1963, does not apply to such cases. **Judgment:** The court dismissed the writ petition, upholding the appellate authority's order. It held that the CGST Act is a special statute and a self-contained code, and Section 107 has an inbuilt mechanism for limitation periods. In the absence of any clause allowing condonation of delay by showing sufficient cause after the prescribed period, the provisions of the Limitation Act, 1963, cannot be applied to extend the limitation period under Section 107 of the CGST Act. **FAQs:** Q: What is the significance of this judgment? A: This judgment affirms the strict application of the limitation period prescribed under Section 107 of the CGST Act and clarifies that the appellate authorities do not have the power to condone delays beyond the statutory limit by invoking the Limitation Act, 1963. Q: Can the Limitation Act, 1963, be applied to other provisions of the CGST Act? A: No, the court's reasoning suggests that the Limitation Act, 1963, cannot be applied to any provision of the CGST Act unless explicitly provided for, as the CGST Act is a self-contained code. Q: What is the rationale behind the strict application of the limitation period under the CGST Act? A: The court's decision is based on the principle that the CGST Act is a special statute, and its provisions must be strictly adhered to. The limitation period is a statutory requirement, and the appellate authorities cannot extend it beyond the prescribed limit. Q: What recourse does a party have if they miss the limitation period under the CGST Act? A: If a party misses the limitation period prescribed under Section 107 of the CGST Act, they cannot seek condonation of delay from the appellate authorities. Their only recourse may be to file a writ petition before the High Court, challenging the order on other grounds, if available.

1. Heard Sri Suyash Agarwal, learned counsel for the petitioner, Sri Parv Agarwal, learned counsel for respondent No.1 and learned Standing Counsel for the State.

2. This is a writ petition under Article 226 of the Constitution of India wherein the petitioner is aggrieved by the order dated August 28, 2023 passed by the appellate authority being the Commissioner (Appeals), CGST and Central Appeal Commissionerate, Allahabad under Section 107 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the Act").

3. By the aforesaid order, the appellate authority dismissed the appeal filed by the petitioner on the ground that the same was time barred as it was filed beyond the period of four months. At paragraph 3.1 of the aforesaid order, the appellate authority has clearly pointed out that the petitioner has received the order dated October 13, 2021, whereas the appeal was filed on July 20, 2023, that is, after the period of more than 20 months and way beyond the time prescribed under Section 107 of the Act.

4. Upon perusal of the memo of appeal filed by the petitioner, it is clear that the order was communicated on October 13, 2021, as admitted by the petitioner itself. It is further to be noted that the order cancelling the registration was passed even earlier on January 22, 2021 and had been uploaded on the portal. As there is no dispute with regard to communication of the order and the fact that the appeal was filed beyond the time prescribed, this Court under the extraordinary jurisdiction cannot interfere with the appellate authority's order as the application of Limitation Act, 1963 does not apply to Section 107 of the Act.

5. The Supreme Court in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur and Others reported in (2008) 3 SCC 70, while dealing with a similar issue as in the present case, has held as under:

"8. The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of statute are not vested with jurisdiction to condone the delay beyond the permissible period provided under the statute. The period up to which the prayer for condonation can be accepted is statutorily provided. It was submitted that the logic of Section 5 of the Limitation Act, 1963 (in short “the Limitation Act”) can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow it to be presented within a further period of 30 days. In other words, this clearly shows that the appeal has to be filed within 60 days but in terms of the proviso further 30 days' time can be granted by the appellate authority to entertain the appeal. The proviso to subsection (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only up to 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days' period."

6. In Commissioner of Customs and Central Excise v. Hongo India Private Limited and Another reported in (2009) 5 SCC 791, the Supreme Court has reiterated its stand and held as under:

"31. In this regard, it is useful to refer to a recent decision of this Court in Punjab Fibres Ltd. [(2008) 3 SCC 73] The Commissioner of Customs, Central Excise, Noida was the appellant in this case. While considering the very same question, namely, whether the High Court has power to condone the delay in presentation of the reference under Section 35-H(1) of the Act, the two-Judge Bench taking note of the said provision and the other related provisions following Singh Enterprises v. CCE [(2008) 3 SCC 70] concluded that: (Punjab Fibres Ltd. case [(2008) 3 SCC 73] , SCC p. 75, para 8)

“8. … the High Court was justified in holding that there was no power for condonation of delay in filing reference application.”

32. As pointed out earlier, the language used in Sections 35, 35-B, 35-EE, 35-G and 35-H makes the position clear that an appeal and reference to the High Court should be made within 180 days only from the date of communication of the decision or order. In other words, the language used in other provisions makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning the delay only up to 30 days after expiry of 60 days which is the preliminary limitation period for preferring an appeal.

In the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. The High Court was, therefore, justified in holding that there was no power to condone the delay after expiry of the prescribed period of 180 days."

7. The Central Goods and Services Act is a special statute and a self-contained code by itself. Section 107 of the Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite law that Section 5 of the Limitation Act, 1963 will apply only if it is extended to the special statute. Section 107 of the Act specifically provides for the limitation and in the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. Accordingly, one cannot apply Section 5 of the Limitation Act, 1963 to the aforesaid provision.

8. In light of the above, no interference is required in this petition and the same is, accordingly, dismissed.

Order Date :- 19.1.2024

Kuldeep

(Shekhar B. Saraf,J.)