The Patna High Court has interpreted section 107(1) of GST Act in favour of assessee.
The bench of Justice Rajeev Ranjan Prasad and Justice Ramesh Chand Malviya has observed that the appellate authority has completely erred in appreciating the legislative scheme under Section 107 of the CGST Act. The legislatures have clearly provided in wisdom that the period of limitation for filing the appeal would be three months and it may be presented within a further period of one month subject to showing sufficient cause to the appellate authority for not preferring the appeal within the prescribed period of limitation.
The petitioner/assessee is a private limited company incorporated under the provisions of the Companies Act, 1956 having its registered office at Patna. It is registered in the State of Bihar under the provisions of the Central Goods and Services Tax.
The provisions of Sections of CGST Act, 2017 read along with relevant rules are at pari materia with the provisions of Bihar Goods and Services Tax Act, 2017.
The petitioner contended that a GST proceeding was initiated against the petitioner by respondent vide show-cause notice under Section 73(1) of the BGST/CGST Act, 2017 for the tax period July 2017 to March 2018. In the show-cause notice, a direction was issued to the petitioner to make payment of outstanding demand of tax amounting to Rs. 81,21,878/- along with interest under Section 50 amounting to Rs. 77,97,004 and penalty of Rs. 8,12,187/- respectively.
The petitioner was called upon to submit its reply on or before 27.09.2023. A date of personal hearing was fixed on 10.10.2023. The petitioner submitted that even as a date of hearing has been fixed but that would not be taken as an effective date.
The court has held that the three months period from the date of receipt of the order of the adjudicating authority expired on 27.03.2024. The appellant could have preferred an appeal within a further period of one month i.e. 27.04.2024 showing sufficient cause to the appellate authority to satisfy him that the appellant was prevented by sufficient cause from presenting the appeal within the further period of one month. In this case, the appeal was preferred on 26.04.2024, therefore, the appellate authority was required to consider the cause shown by the appellant to condone the delay.
The court directed the appellate authority to restore the appeal to its original file and consider the reasons shown by the petitioner for not preferring the appeal within three months which is the prescribed period of limitation.
Case Details
Case Title: Brand Protection Services Private Limited Versus State of Bihar
Case No.: Civil Writ Jurisdiction Case No.14957 of 2024
Date: 04-02-2025
Counsel For Petitioner: Anubhav Khowala
Counsel For Respondent: Vivek Prasad
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