Facts of the Case

The petitioner, Mount Velour Rubber Works (P) Ltd., a company engaged in business at Nilampathy, Amarambalam, Nilambur, Malappuram, Kerala, represented by its Managing Director, had for earlier tax periods filed several monthly returns belatedly on 30.03.2019 under the cover of extended-timeline notifications issued by the CBIC, and paid interest of Rs. 1,26,874/- on the delayed filings. It was subsequently issued a show cause notice dated 29.03.2022 under Section 73(1) of the CGST/SGST Act, 2017, to which it filed a reply on 28.04.2022. A further show cause notice dated 24.01.2023 was issued, followed by an order dated 23.03.2023 (No. 06/2022-23-GST) and a Form GST DRC-07 summary dated 11.05.2023. The petitioner then filed a rectification petition on 30.06.2023, which was rejected by the Assistant Commissioner through an undated order under DIN 20230758TJ0000000F2D (Exhibit P-16). The present writ petition was filed before the Kerala High Court challenging Exhibit P-16, but at the hearing the petitioner's counsel sought to withdraw the petition instead, to pursue a statutory appeal under Section 107 of the GST Act, requesting that limitation be reckoned from 19.07.2023, the date of the rectification order, rather than from the earlier order dated 23.03.2023.

Issues Involved

  1. Whether the petitioner should be permitted to withdraw the writ petition and pursue the statutory appellate remedy under Section 107 against the rectification order instead.
  2. From which date the limitation period for filing such an appeal should be computed - the original assessment order or the subsequent rectification order.

Petitioner's Arguments

  • The petitioner sought liberty to withdraw the writ petition challenging Exhibit P-16 and instead pursue a statutory appeal under Section 107 of the GST Act.
  • Since the rectification order (Exhibit P-16) is dated 19.07.2023, limitation for the Section 107 appeal should be computed from that date rather than from the earlier original order dated 23.03.2023.

Respondent's Arguments

  • The learned Government Pleader had no objection to the petitioner's prayer for withdrawal with liberty to appeal.
  • No opposition was raised to computing limitation from the date of the rectification order.

Court Order/Findings

  • The Court recorded the consensus between the parties and permitted the withdrawal of the writ petition after hearing brief arguments from both sides on the appropriate course of action.
  • The petition was dismissed as withdrawn, with liberty granted to the petitioner to file an appeal against Exhibit P-16 under Section 107 of the GST Act, 2017.
  • The appellate authority was directed to consider the question of limitation with effect from 19.07.2023, the date on which the rectification order was passed, rather than from the date of the original assessment order.

Important Clarification

Where a rectification order under the GST Act supersedes or modifies an earlier assessment order, the limitation period for filing a statutory appeal under Section 107 can, by consent or court direction, be reckoned from the date of the rectification order rather than the original order, particularly where the petitioner has diligently pursued rectification before resorting to the appellate remedy. This protects an assessee who genuinely attempts the rectification route first from being time-barred by the time that route is exhausted.

Sections Involved

  • Section 107, CGST Act, 2017 - appeal to the Appellate Authority, including the limitation period for filing.
  • Section 161, CGST Act, 2017 - rectification of errors apparent on the face of the record.
  • Section 73, CGST Act, 2017 - determination of tax not paid, under which the original show cause notice was issued.

Decision – In Favour of

This is a thin, procedural disposal on withdrawal, with no merits decided either way. It is best read as a modest accommodation for the Assessee, since the Court secured a favourable limitation starting point (the rectification order date) for the petitioner's forthcoming Section 107 appeal, without either party obtaining any substantive ruling on the underlying tax demand or the correctness of the assessment order itself.

Related Case Laws

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

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) NO. 33129 OF 2023
  • CNR: Not available
  • Coram: Justice Dinesh Kumar Singh
  • Decision Date: 17 October 2023
  • Disposal Nature: Dismissed as withdrawn with liberty to file Section 107 appeal

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