Appeal Rejection Quashed: Pre-deposit paid from Electronic Credit Ledger , Appellate Authority to Consider Condonation of Delay

(Last Updated On: February 13, 2025)

Appeal Rejection Quashed: Pre-deposit paid from Electronic Credit Ledger , Appellate Authority to Consider Condonation of Delay

Summary in Key Points:

Issue: Was the rejection of the assessee’s appeal justified based on limitation and alleged non-payment of pre-deposit, despite the assessee claiming that the entire disputed tax amount had already been paid?
Facts: The assessee’s appeal was rejected due to a delay and alleged non-payment of pre-deposit. The assessee argued that they were unaware of the earlier appeal’s rejection and that the entire disputed amount had already been debited from their electronic credit ledger, making a pre-deposit unnecessary.
Decision: The court found that the delay was not deliberate and that the appellate authority had overlooked the assessee’s claim of full payment, which would have waived the pre-deposit requirement. The court quashed the appellate order and directed the Appellate Authority to consider the assessee’s application for condonation of delay on its merits.

Important Note: This decision highlights the importance of considering all relevant facts and exercising discretion fairly when dealing with appeals. The appellate authority’s failure to acknowledge the assessee’s claim of full payment and their rigid adherence to procedural timelines led to an unjust outcome. The court’s intervention ensures that the assessee’s appeal is given due consideration, preventing a miscarriage of justice due to procedural technicalities. This ruling promotes a more equitable approach to resolving tax disputes and ensures that taxpayers have a fair opportunity to present their case, even if there are delays or procedural lapses.

HIGH COURT OF CALCUTTA

Ashoka India Corporation

Assistant Commissioner of Revenue, State Tax

Rajarshi Bharadwaj, J.

WPA 26540 of 2024

DECEMBER 19, 2024

Rituraj Chakraborty for the Petitioner. Anirban Ray, T.M. Siddiqui, Nilotpal Chatterjee, Tanoy Chakraborty and Saptak Sanyal for the Respondent.

ORDER

1. Learned counsel appearing for the petitioners submits that the petitioners have preferred an appeal after payment of the whole amount of disputed tax. So the question of predeposit at the time of filing of the appeal does not arise.

2. Learned counsel further submits that the petitioners have failed to submit one application for condonation of delay while filing an appeal and the appellate authority has passed an order rejecting the appeal of the petitioners on the ground of delay.

3. Learned counsel prays for a direction from this Court to the appellate authority for accepting an application for delay to b filed by the petitioners before going into the merits of the case and be heard the application for delay before passing an order on merits of the appeal.

4. Learned counsel appearing for the respondent authorities submits that as the whole amount of tax has been paid there is no question of predeposit but as the petitioners have not preferred an application for condonation of delay for filing an appeal, the appeal was rejected.

5. Heard learned counsels appearing for the parties. Upon a thorough examination of the documents presented to the Court and taking into account the arguments put forth by the parties, this Court allows the writ petition as statutory provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated, particularly, in light of judicial precedents supporting such relief.

6. In S. K. Chakraborty & Sons v. Union of India reported in [2024] 159 taxman.com 259 (Calcutta), the Hon’ble Division Bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi held that: –

“19. Section 107 of the Act of 2017 does not exclude the applicability of the Act of 1963 expressly. It does not exclude the applicability of the Act of 1963 impliedly also if one has to consider the provisions of Section 108 of the Act 2017 which provides for a power of revision to the designated authority, against an order of adjudication. In case of revision a far more enlarged period of time for the Revisional Authority to intervene has been prescribed. Two periods of limitations have been prescribed for two different authorities namely, the Appellate Authority and the Revisional Authority in respect of the same order of adjudication. Any interference with the order of adjudication either by the Appellate Authority or by the Revisional Authority would have an effect on the defaulter/notice. Section 107 does not have a non-obstante clause rendering Section 29(2) of the Act of 1963 non-applicable. In absence of specific exclusion of the Section 5 of the Act 1963 it would be improper to read an implied exclusion thereof. Moreover, Section 107 it its entirely has not expressly stated that, Section 5 of the Act of 1963 stands excluded.

20. Therefore, in our view, since provisions of Section 5 of the Act of 1963 have not been expressly or impliedly excluded by Section 107 of the Act of 2017 by virtue of Section 29(2) of the Act of 1963, Section 5 of the Act of 1963 stands attracted. The prescribed period of 30 days from the date of communication of the adjudication order and the discretionary period of 30 days thereafter, aggregating to 60 days is not final and that, in given facts and circumstances of a case, the period for filling the appeal can be extended by the Appellate Authority”.

7. The rejection of the appeal, therefore, lacked due consideration of these facts. While the petitioner acknowledges missing the extended deadline under Notification No. 53/2023 due to unawareness of the earlier appeal’s rejection, the delay was not deliberate.

8. Moreover, the appellate authority rejected the appeal on May 30, 2024, citing limitation and non payment of the required pre-deposit of 12.5% of the disputed tax. However, the disputed tax amount of Rs.32,67,900.00/- (Rs.16,33,950.00/- each for CGST and SGST) had already been debited from the petitioner’s electronic credit ledger on 20.05.2022. The petitioner’s appeal petition (Form GST APL-01) clearly reflected in Table 15(a) that no pre-deposit was required and in Table 15(b) that the entire disputed amount had been paid.

9. In light of the procedural irregularities and the arbitrary nature of the actions, this court finds the petitioner’s case to be meritorious. Accordingly, the writ petition is allowed and the appellate order dated May 30, 2024 is quashed. The Appellate Authority is requested to consider and decide the application for condonation of delay filled by the petitioner 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, hear and dispose the appeal on merit.

10. All pending applications are accordingly disposed of.

11. There shall be no order as to costs.

All parties shall act on the server copy of this order duly downloaded from the official website of this Court.