Calcutta High Court Allows Delayed GST Appeal Where Mandatory Pre-Deposit Was Made

Overview

The Calcutta High Court in VA Tech Wabag Ltd. Vs Assistant Commissioner of Revenue (Calcutta High Court) examined whether an appeal filed under Section 107 of the Central Goods and Services Tax Act, 2017 could be dismissed purely on the ground of limitation, despite:

  • Full compliance with the mandatory pre-deposit requirement under Section 107(6), and
  • A reasonable and supported explanation for the delay.

The Court ultimately set aside the order of the First Appellate Authority and directed that the appeal be heard on merits, after condoning the delay.

Factual Background

Adjudication Order Under Section 73

  • An adjudication order under Section 73 of the Central Goods and Services Tax Act, 2017 was passed on 13.03.2023 by the adjudicating authority.
  • This order was made available to the assessee through the GST portal.
  • The assessee later challenged the interest component of the demand raised through this order.

Appeal Filed With Delay

  • The assessee filed an appeal before the First Appellate Authority on 21.08.2023 under Section 107.
  • The appeal was directed specifically against the quantum of interest levied by the department.
  • Alongside the appeal, the assessee deposited the statutory pre-deposit mandated by Section 107(6).

Dismissal by First Appellate Authority

  • The First Appellate Authority dismissed the appeal by order dated 29.11.2023.
  • The dismissal was based solely on limitation:
    • It was held that the appeal had been filed beyond the period stipulated in Section 107(1) and Section 107(4).
    • The authority further held that it had no power to condone delay beyond the statutory outer limit.
  • Corresponding GST Form APL-02 was issued to reflect the dismissal.

Assessee’s Explanation for Delay

Reason Cited for Late Filing

The assessee contended before the Court that:

  • The delay was neither intentional nor deliberate.
  • The assessee’s business operations and communication of statutory orders through the GST portal were handled by a specific individual.
  • This entrusted person had suffered serious illness, which disrupted the normal flow of communication and compliance.
  • Due to this medical condition, the assessee remained unaware of the adjudication order for some time, leading to the delay in filing the appeal.

Supporting Evidence

  • The assessee placed medical records on the Court’s record to substantiate the illness of the person responsible for compliance.
  • It was argued that a detailed explanation had already been furnished in response to the show cause notice dated 06.10.2023, demonstrating sufficient cause for the delay.

Submissions on Behalf of the Assessee

The assessee advanced the following principal arguments: