Facts of the Case

The petitioner, Chattanchal Super Market, a registered partnership having its office at Chattanchal, Kasaragod, Kerala, represented by its Managing Partner Mohammed Kunhi Abdul Nisar, challenged an appellate order (Exhibit P-5) passed by the Joint Commissioner of State Tax Appeals, Kozhikode, dismissing its appeal against an assessment order (Exhibit P-4) dated 04.07.2022. The assessing authority had disallowed the petitioner's claim of input tax credit under Section 16(2)(c) of the GST Act, 2017, on the ground that the petitioner's supplier(s) had not paid the tax charged, to the extent of Rs.58,978/- each under CGST and SGST, and Rs.58/- under IGST, for FY 2017-18. The petitioner was earlier put on notice through FORM GST ASMT-10, FORM GST DRC-01A and thereafter FORM GST DRC-01, but did not respond or produce evidence to substantiate its ITC claim. The order was uploaded on the GST portal, giving the petitioner notice of it, yet the appeal against it was filed only on 25.05.2023 — well beyond the period (including the condonable extension) prescribed under Section 107 of the GST Act. The appellate authority dismissed the appeal solely on the ground of delay, holding it had no power to condone delay beyond the statutory limit.

Issues Involved

  1. Whether the High Court, in writ jurisdiction, can extend the limitation prescribed under Section 107(5) of the GST Act for filing an appeal where the statute confers no power of condonation on the appellate authority.
  2. Whether the assessing authority was justified in disallowing ITC under Section 16(2)(c) where the petitioner failed to discharge its burden under Section 155 despite repeated notices.
  3. Whether the dismissal of the appeal on the ground of limitation, and the underlying denial of ITC, warranted interference in writ jurisdiction.

Petitioner's Arguments

  • The petitioner impugned the dismissal of its appeal on the technical ground of delay, seeking the Court's intervention to have the matter examined on its substantive merits regarding entitlement to ITC.

Respondent's Arguments

  • The order disallowing ITC was validly passed after the petitioner failed to respond to the show-cause notices in FORM GST ASMT-10 and FORM GST DRC-01A, and thereafter FORM GST DRC-01.
  • The burden to prove eligibility for ITC under Section 155 of the GST Act lay squarely on the petitioner, who neither replied nor produced any material in support of the claim.
  • Since the appeal was filed well beyond the limitation prescribed under Section 107, and the statute confers no power to condone such delay, the appellate authority correctly dismissed it.

Court Order/Findings

  • Where the statute does not confer power on the appellate authority to condone delay in filing an appeal under Section 107(5) of the GST Act, the writ court cannot, in exercise of its extraordinary jurisdiction, extend that limitation.
  • On the merits of the underlying ITC denial, the assessing authority, after noticing the difference between GSTR-3B and GSTR-2A, had put the petitioner on notice to discharge its burden under Section 155; the petitioner's failure to bring forward supporting material left the authority no option but to proceed on the basis of the GSTR mismatch.
  • The Court found no error of jurisdiction or law committed by either the assessing or the appellate authority.
  • The writ petition was held to be devoid of merit and was accordingly dismissed.

Important Clarification

The limitation period under Section 107 of the GST Act for filing a first appeal, including the maximum condonable extension, is a hard statutory boundary; where the appellate authority has no power to condone delay beyond it, the High Court will not use writ jurisdiction to extend that limitation, however meritorious the underlying claim may appear. Assessees must also actively respond to ASMT-10/DRC-01A notices and substantiate ITC claims with evidence of Section 16(2) compliance, since silence at the notice stage forecloses the argument later.

Sections Involved

  • Section 16(2)(c), GST Act, 2017 — disallows ITC where the tax charged has not actually been paid to the Government by the supplier.
  • Section 107, GST Act, 2017 — prescribes the limitation period and appellate procedure for challenging an assessment order, with a limited condonable extension.
  • Section 155, GST Act, 2017 — places the burden of proving ITC eligibility on the person claiming the credit.

Decision – In Favour of

The decision is in favour of the Department. The Kerala High Court declined to interfere either with the time-barred dismissal of the appeal or with the underlying denial of ITC, and dismissed the writ petition as devoid of merit.

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. 34308 of 2023
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice Dinesh Kumar Singh
  • Decision Date: 17-10-2023
  • Disposal Nature: Dismissed

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