Four months – 120 or 121 days – litigation initiated by appellate authority by adopting meaning of four months as 120 days causing tax payer to approach High Court.

[DEV KUMAR KOTHARI]

Provision and case under study:

Provisions of S. 107 of CGST Act and corresponding S.107 of State GST Act.

SHRI RAM PLY PRODUCT THRU. ITS PARTNER SHRI ARUN KUMAR JINDAL VERSUS ADDL. COMMISSIONER GRADE 2 APPEAL STATE TAX SITAPUR AND 2 OTHERS - 2023 (5) TMI 559 - ALLAHABAD HIGH COURT

Writ Tax No. - 96 of 2023 Dated: - 21-4-2023

The case pertains to an  appeal u.s. 107 of CGST Act and corresponding S.107 of State GST Act.

As seen from the provision  reproduced with highlights in table provided in this write up  the  appeal was  to be filed within three  months.  And the appellate authority can condone delay for one month. The appellant counted  four months  (including condonable one month) according to calendar month , however, appellate authority considered period of four months as 120 days and summarily dismissed appeal.

This forced taxpayer to approach the Allahabad  High Court by way of Writ Petition because otherwise tax payer is burdened with demand which is disputed and need consideration by appellate authority.

Counting of months – four months:

While counting months as calendar month period of four month may cover some months with 30 days , some with 31 days and also 28 days or 29 days in case of month of February of calendar month falling within range of four months to be considered.

Earlier article about counting of months:

Capital gains- meaning and counting of month General- tax payers must avoid last moment action to avoid doubt,contingencies and un-certainities.

An Article By: - CA DEV KUMAR KOTHARI  April 30, 2014

https://www.taxmanagementindia.com/print/print_Article.asp?ID=5595

In the above article the author has discussed provisions of the Income-tax Act, 1961 wherein expressions days, months and years are found in different provisions. After discussion author has expressed view that to avoid litigation last minute rush should be avoided and desired action should be taken well in time to comply with requirement of counting and determining last day in a safe manner.

However, in spite of sincere efforts some time delay may take place. In some provisions there is scope to condone delay however, in some provisions limitation provided are not permissible to be extended.

In the case discussed in this article,  as per relevant  provisions limitation is provided as ‘four month’.

The appeal was summarily dismissed on the ground that it was beyond maximum period of four months , as prescribed under the statute i.e. four months which include condonable period of one month also.

If in a case month of February falls for counting of period of limitation the period of 120 days may cover more calendar months. In that case it would be safer to consider February also as one of calendar month.

High Courts order allowed appeal filed after 120 days on 121 st  day.

The honorable High Court considered provisions. The order is analyzed below:

Aappeal was  dismissed on the ground that it was beyond maximum period, as prescribed under the statute i.e. four months –

 Bare reading of the provisions of Section 107 of the Act, 2017 reflects that it is not 120 days, but it is four months and, therefore, it would depend upon the date on which date the adjudicating authority passes the order.

The four months may be of 121 days or 122 days, as the case may be. In the present case, in four months, around 121 days come, and the appeal was filed on 121st day.

The appellate authority should have entered into the merit of the application whether it disclosed sufficient cause for not filing the appeal within the period of three months.

instead of entering into merit of the application to condone delay on one month  the appeal has been summarily dismissed only on the ground that it was beyond 120 days, and not within 120 days.

The appeal is restored to its original number, and the appellate Authority is directed to proceed with the appeal, and decide the same on merit, expeditiously, in accordance with law - petition allowed.

Relevant provisions of CST and SGST are reproduced below with highlights added  by author:

Statutory Provisions CENTRAL GOODS AND SERVICES TAX ACT, 2017 CHAPTER XVIII APPEALS AND REVISION

Statutory Provisions Uttar Pradesh Goods and Services Tax Act, 2017 CHAPTER–XVIII APPEALS AND REVISION

Appeals to Appellate Authority. 107. (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. (2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order. (3) Where, in pursuance of an order under sub-section (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application. (4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month. (5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed. (6) No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order 1[subject to a maximum of twenty-five crore rupees], in relation to which the appeal has been filed. 2[Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.] (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed. (8) The Appellate Authority shall give an opportunity to the appellant of being heard. (9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable. (11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order: Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order: Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74. (12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision. (13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed: Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year. (14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority. (15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf. (16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties.   ****** Notes 1. Inserted vide Central Goods and Services Tax (Amendment) Act, 2018 w.e.f. 01-02-2019 2. Inserted vide THE FINANCE ACT, 2021 dated 28-03-2021 w.e.f. 01-01-2022

Appeals to Appellate Authority. 107. (1) Any person aggrieved by any decision or order passed under this Act or the Central Goods and Services Tax Act, 2017 (Act no. 12 of 2017) by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. (2) The Commissioner may, on his own motion, or upon request from the Commissioner of central tax, call for and examine the record of any proceeding in which an adjudicating authority has passed any decision or order under this Act or the Central Goods and Services Tax Act, 2017 (Act no. 12 of 2017) for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order. (3) Where, in pursuance of an order under sub-section (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application. (4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month. (5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed. (6) No appeal shall be filed under sub-section (1), unless the appellant has paid – (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten percent of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed. (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed. (8) The Appellate Authority shall give an opportunity to the appellant of being heard. (9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable. (11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order: Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order: Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74. (12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision. (13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed: Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year. (14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority. (15) A copy of the order passed by the Appellate Authority shall also be sent to the Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of central tax or an authority designated by him in this behalf.       (16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties.     Remarks of author.   Corresponding amendment is not found in State GST Act, as reproduced above and also in case of some other states.