HC holds delay in filing of appeal can be condoned beyond the limitation period prescribed under GST

This tax alert summarizes a recent decision of the Calcutta High Court (HC)  on applicability of Limitation Act, 1963 (Limitation Act) for condoning the delay in filing of appeal under Section 107 of the West Bengal State Goods and Services Tax Act, 2017 (WBGST Act). 

As per section 107(1), any person aggrieved by any decision or order passed by an adjudicating authority may appeal to Appellate Authority within three months from the date on which the said decision or order is communicated to such person.

Further as per sub-section (4), the Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the period of three months, allow it to be presented within a further period of one month.

HC observed that:

• The key principle of determining applicability of provisions of Limitation Act to a special law is to consider the scheme of such special law so as to determine whether there is any express or implied exclusion of the provisions of the Limitation Act or not.

• Section 107 does not have a non-obstante clause rendering Section 29(2) of the Limitation Act non-applicable. 

• In absence of specific exclusion of Section 5 of Limitation Act it would be improper to read an implied exclusion thereof. 

• Thus, the provisions of Section 5 of Limitation Act stand attracted and the period for filing of appeal can be extended by the appellate authority.

Accordingly, HC requested Appellate Authority to consider and decide the application for condonation of delay on merits. If the explanations advanced for condonation of delay are accepted to be sufficient, the Appellate Authority may condone the delay in preferring the appeal. 

Comments

The ruling is likely to help taxpayers who were not able to file the appeal within the prescribed limit due to genuine reasons, in obtaining condonation from the appellate authority.

Earlier, the Government had introduced an amnesty scheme for filing appeal before Appellate Authority where the appeal could not be filed against the demand order passed on or before 31 March 2023, or the appeal was rejected solely on the ground of being time-barred.

It is relevant to note that Kerala HC in similar facts denied condonation of delay on the ground that Section 107 has an inbuilt mechanism and has impliedly excluded the applicability of provisions of Limitation Act [TS-254-HC(KER)-2023-GST].