Facts of the Case

Smt. Basanti Shial challenged an order dated 31.12.2020 passed by the Additional Commissioner of State Tax (Appeal), Balasore, rejecting her first appeal against an order dated 06.03.2020 passed by the Proper Officer under Section 74(9) of the Odisha Goods and Services Tax Act, 2017 and issued in Form GST DRC-07. The appeal, filed under Section 107 on 13.11.2020, was rejected by the Appellate Authority as barred by limitation, since the prescribed three-month period (expiring 05.06.2020) together with the one-month condonable period had lapsed before the appeal was presented, and the certified copy of the impugned order was submitted only on 21.12.2020 pursuant to a show cause notice. The petitioner sought a writ of certiorari quashing the appellate rejection order and a mandamus directing restoration of First Appeal Case No. AD2111200030682.

Issues Involved

  1. Whether the Appellate Authority was justified in rejecting the first appeal as time-barred under Section 107(1) and (4) of the OGST Act.
  2. Whether the Supreme Court's suo motu order extending limitation on account of the COVID-19 pandemic applied to save the delay in filing the GST appeal.

Petitioner's Arguments

  • The limitation period for filing the appeal fell squarely within the first phase of the COVID-19 pandemic and the resultant nationwide lockdown.
  • Relying on the Supreme Court's order dated 23.03.2020 in In re: Cognizance for Extension of Limitation, the Appellate Authority ought to have appreciated the plight of litigants during the pandemic and entertained the appeal on merits instead of rejecting it on limitation.

Respondent's Arguments

  • The Additional Standing Counsel for CT&GST vehemently opposed the petitioner's contention and supported the order passed by the Appellate Authority rejecting the appeal as time-barred.

Court Order / Findings

  • The Court traced the Supreme Court's suo motu orders extending limitation nationwide from 15.03.2020, its final disposal order dated 08.03.2021 excluding the period from 15.03.2020 to 14.03.2021 in computing limitation, and the CBIC clarification dated 20.07.2021 (adopted by the Odisha Commissionerate) confirming that the extension applies to appeals filed before appellate authorities under GST law.
  • The Court also noted Section 168A of the OGST Act and the State Government notification dated 22.06.2020 extending statutory timelines on account of the pandemic.
  • The Court held that since the limitation period for filing the appeal had lapsed during the COVID-19 pandemic, the delay ought to have been condoned by the Appellate Authority, and the petitioner was entitled to the benefit of the Supreme Court's limitation-extension orders.
  • The order dated 31.12.2020 rejecting the appeal was set aside, and the Appellate Authority was directed to restore First Appeal Case No. AD2111200030682 and adjudicate the grounds of appeal on merits, in accordance with the principles of natural justice.
  • The Court clarified that, barring the limitation issue, nothing was decided on the merits of the original order dated 06.03.2020 passed under Section 74 of the OGST Act.

Important Clarification

  • The Supreme Court's suo motu COVID-19 limitation-extension orders apply to appeals filed before appellate authorities under GST law, as clarified by the CBIC circular dated 20.07.2021, and appellate authorities must condone delay falling within the protected period accordingly.
  • Rejection of an appeal on limitation, followed by its restoration, does not amount to a decision on the merits of the underlying tax demand; the adjudicating findings under Section 74 remain open for consideration afresh in the restored appeal.

Sections Involved

  • Section 107(1) & (4), OGST Act 2017 — prescribes the limitation period for filing a first appeal and the Appellate Authority's power to condone delay up to one further month.
  • Section 74(9), OGST Act 2017 — governs determination of tax not paid by reason of fraud, wilful misstatement or suppression of facts.
  • Section 168A, OGST/CGST Act 2017 — empowers extension of time limits under GST law in situations of force majeure such as the COVID-19 pandemic.
  • Rule 142(5), OGST Rules 2017 — prescribes Form GST DRC-07 as the summary of the order raising a demand.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee — the rejection of the appeal on limitation was set aside and the appeal restored for hearing on merits, with no finding on the merits of the underlying Section 74 demand.

Related Case Laws

  • Posts on Section 107 OGST/CGST Act appeal limitation and condonation of delay on this site.
  • Related posts on the Supreme Court's COVID-19 limitation-extension order and its application to GST proceedings.

Case Details

  • Court: High Court of Orissa at Cuttack
  • Case No.: W.P.(C) No. 7490 of 2021
  • Coram: Justice Jaswant Singh and Justice M.S. Raman
  • Date of Order: 11.03.2022

Link to Download the Order

https://mytaxexpert.co.in/uploads/1787067490_4504compressed.pdf

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