GST Appellate Authority is competent to hear Appeal by Condoning Delay beyond one month from prescribed period u/s 107(4): Calcutta High Court [Read Order]

In a recent case, the Calcutta High Court held that Goods and Services Tax ( GST ) Appellate Authority is competent to hear Appeal by condoning Delay beyond one month from prescribed period under section 107(4) of Central Goods and Service Tax ( CGST ) Act, 2017.

Subhabrata Mukherjee, the petitioner challenged the order dated 27th February, 2024, whereby the appeal filed by the petitioner under Section 107 of the West Bengal/Central Goods and Services Tax Act, 2017 (the said Act) had been rejected.

The petitioner claimed to be the sole proprietor of M/s. Snehangi Traders, which is duly registered under the provisions of the said Act. The petitioner contended that the petitioner has been regularly complying with the provisions of the said Act. Incidentally, on or about 8th June, 2023, the petitioner was served with a show cause notice under Section 73 of the said Act alleging short- payment/non-payment of tax for tax period July, 2017 to March, 2018. The same culminated in the order dated 12th July, 2023 passed under Section 73(9) of the said Act.

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The petitioner claimed to be unaware with regard to the aforesaid till such time the notice for recovery of tax under Section 79 of the said Act was served on the petitioner’s e- mail on 29th October, 2023.

The petitioner had preferred an appeal before the appellate authority under Section 107 of the said Act and had also made payment of the pre-deposit as required under Section 107(6) of the said Act. The said appeal was accompanied by a detailed application explaining the delay in filing the same.

There was a delay of 73 days, excluding the prescribed period and a month thereafter for filing the appeal. The delay, according to the petitioner had occasioned by reasons of the petitioner not having knowledge with regard to the factum of issuance of the show-cause notice and with regard to the lack of knowledge as regards the factum of passing of the order under Section 73(9) of the said Act, until service of email on 29th October, 2023.

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Mr. Choraria, advocate representing the petitioner by drawing attention of the Court to the statements made in the application for condonation of delay including those made in the supplementary affidavit, submitted that not only the show cause notice but the final order passed under Section 73(9) of the said Act was not available for viewing on the “view notices” tab but was only available on “additional view notices” section. The petitioner, being unaware with regard to the same, could not take appropriate steps in the matter.

The court set aside the same and remanded the matter back to the authorities on the ground that the registered tax payer had been prevented from responding to the show-cause notice, by reasons of lack of knowledge, which constitute violation of principles of natural justice.

It was submitted that on one hand the petitioner had been prevented from responding to the show-cause notice and on the other the appellate authority by ignoring the case made out by the petitioner had purported to reject the said appeal by concluding there is no reasonable cause for the petitioner to file the appeal beyond one month of the time prescribed for preferring an appeal.

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Mr. Sanyal, advocate representing the respondents on the other hand submitted that the respondents have no control as to where the show cause notice and the order shall be uploaded on the portal. The aforesaid show-cause notice and the order are uploaded by GSTIN Network. The petitioner has not made the GSTIN Network a party.

A single bench of Justice Raja Basu Chowdhury held that no useful purpose will be served by remanding the matter to the appellate authority to reconsider the application for condonation of delay. Since, the explanation provided by the petitioner appears to be sufficient, by condoning the delay,the Court  directed the appellate authority to hear out and dispose of the appeal of merit after giving the petitioner an opportunity of hearing.

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