Facts of the Case

M/s Micro Zone, a sole proprietorship firm based in Purnea, Bihar, represented by its proprietor, had filed an appeal under Section 107 of the Bihar Goods and Services Tax Act, 2017 (BGST Act) against an assessment order passed under Sections 73/74 of the Act. Section 107 permits three months for filing an appeal, extendable by a further one month on satisfactory explanation for delay. The petitioner's appeal was filed beyond even this extended one-month period and was accordingly rejected by the Appellate Authority (Annexure-5). The petitioner approached the Patna High Court under Article 226, seeking restoration of the appeal by invoking the subsequently issued Notification No.53/2023-Central Tax dated 02.11.2023, which created a special one-time procedure allowing delayed appeals against Section 73/74 orders passed on or before 31.03.2023. The matter was heard by a Division Bench of the Chief Justice and Justice Rajiv Roy, with counsel for the Union of India, the Central GST authorities and the State Tax authorities appearing to address the scope and applicability of the Notification.

Issues Involved

  1. Whether the Court, exercising writ jurisdiction, could condone delay in filing an appeal beyond the statutory period under Section 107(4) of the BGST Act.
  2. Whether the benefit of Notification No.53/2023-Central Tax could be extended to the petitioner's already-rejected appeal.
  3. What conditions must be satisfied for the appeal to be restored and heard on merits.

Petitioner's Arguments

  • The appeal, though delayed, ought to be restored in view of the special dispensation created by Notification No.53/2023-Central Tax, which permits filing of appeals against Section 73/74 orders on or before 31.01.2024.
  • The petitioner was willing to comply with the payment conditions prescribed under the Notification to have the appeal considered on merits.

Respondent's Arguments

  • The Union of India and State Tax authorities did not seriously contest the applicability of the Notification, given its clear terms permitting restoration of delayed appeals against Section 73/74 orders passed on or before 31.03.2023.

Court Order/Findings

  • Ordinarily, neither the Appellate Authority nor the High Court under Article 226 can condone delay beyond the period statutorily prescribed under Section 107 of the BGST Act.
  • However, Notification No.53/2023-Central Tax carves out a special procedure that effectively extends the limitation for delayed appeals against Section 73/74 orders, subject to payment of the admitted tax dues in full and 12.5% of the disputed tax amount (with at least 20% of that 12.5% debited from the Electronic Cash Ledger), capped at Rs.25 crore.
  • The Court set aside the order rejecting the appeal and directed the petitioner to satisfy the Notification's payment conditions before 31.01.2024, upon which the appeal would be considered on merits; failing compliance, the appeal would stand rejected.
  • The Court also observed that even a pending appeal which had been filed with delay could be treated as properly filed on compliance with paragraph 3 of the Notification, and that the 10% pre-deposit already remitted at the time of filing the appeal would count towards the additional 12.5% payment now required, so that only the deficient amount need be paid.
  • The Court clarified, as a general direction, that assessees whose writ petitions against delay-based rejections had earlier been dismissed by the Court could still independently avail the Notification's benefit, and directed the Commissioner, State Taxes, Bihar to issue instructions to officers accordingly.

Important Clarification

Where a beneficial notification such as Notification No.53/2023-Central Tax is issued after an appeal has been rejected for delay, an assessee can still invoke it to have the appeal restored, provided the prescribed pre-deposit conditions are met within the notified cut-off date — even if the assessee's earlier writ challenge to the delay-based rejection was itself dismissed by a court.

Sections Involved

  • Section 107, BGST Act, 2017 — prescribes the limitation period (three months plus a further condonable month) for filing appeals against adjudication orders.
  • Sections 73 and 74, BGST Act, 2017 — govern determination of tax not paid/short paid, in cases without and with fraud/suppression respectively.
  • Notification No.53/2023-Central Tax dated 02.11.2023 — special one-time procedure extending the appeal filing window for orders passed on or before 31.03.2023, subject to a prescribed pre-deposit.

Decision – In Favour of

The writ petition was allowed, and the decision favours the Assessee: the rejection of the delayed appeal was set aside and the appeal restored for consideration on merits, subject to the petitioner satisfying the payment conditions of Notification No.53/2023-Central Tax within the stipulated timeline.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature at Patna
  • Case No.: Civil Writ Jurisdiction Case No.16155 of 2023
  • CNR: Not available
  • Coram: Hon'ble the Chief Justice (K. Vinod Chandran, CJ) and Hon'ble Mr. Justice Rajiv Roy
  • Decision Date: 10-11-2023
  • Disposal Nature: Allowed

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