Kerala High Court Orders Reconsideration of Time-Barred GST Appeal Under Notification No. 53/2023-Central Tax

Background and Context

The decision of the Kerala High Court in Alis Super Market Vs Joint Commissioner of State Tax (Appeals) examines how Section 107 of the CGST/SGST Acts interacts with Notification No. 53/2023-Central Tax dated 02.11.2023, particularly on delayed GST appeals and the requirement of an additional pre-deposit of 2.5% of the disputed tax.

The assessee, Alis Super Market, had filed a writ petition challenging the appellate authority’s order (Ext.P6) by which its statutory appeal under Section 107 was dismissed as being barred by limitation. The crux of the controversy was whether the assessee could claim the benefit of Notification No. 53/2023-Central Tax even though, at the time of filing the appeal, it had not deposited the additional 2.5% of the disputed tax prescribed in the notification, but had paid it subsequently (Ext.P7).

The High Court did not finally adjudicate on whether the assessee is entitled to the benefit of the notification. Instead, it focused on the failure of the appellate authority to examine the applicability of the notification and to afford the assessee an opportunity to cure the defect of non-payment of the additional 2.5% at the initial stage.

Statutory Appeal under Section 107 and Limitation

Ordinary Appeal Mechanism

Section 107 of the CGST/SGST Acts provides the statutory appeal remedy against orders passed by adjudicating or assessing authorities. Under this provision, an assessee:

• Must file an appeal within a specified time limit from the date of communication of the order; and
• Is required to deposit:
  • The full amount of admitted tax, interest, fine, fee and penalty, and
  • A mandatory pre-deposit of 10% of the disputed tax amount.

Appeals filed beyond the prescribed limitation period are liable to be rejected as time-barred, subject only to the limited condonation permitted by statute.

Relaxation Through Notification No. 53/2023-Central Tax

Recognising that several orders had attained finality due to limitation, the Central Government issued Notification No. 53/2023-Central Tax dated 02.11.2023. The notification extended a special window for filing appeals in certain circumstances, even after expiry of the usual time limits under Section 107.

As recorded in the judgment:

• The notification applied to orders passed by the assessing authority on or before 31.01.2023.
• It permitted appeals to be filed beyond the normal limitation laid down in Section 107 provided:
  • The appeal was filed on or before 31.01.2024; and
  • The assessee paid:
    • The mandatory 10% pre-deposit under Section 107, and
    • An additional 2.5% of the disputed tax over and above the said 10%.

Thus, the notification introduced a conditional relaxation of time limits for specified past orders, in exchange for a higher pre-deposit burden on the assessee.

Facts of the Writ Petition

Challenge to the Appellate Order

The writ petition was filed to contest Ext.P6, the order of the appellate authority passed under Section 107 of the CGST/SGST Acts. The appellate authority had rejected the assessee’s appeal solely on the ground that it was lodged beyond the permissible time and was therefore time-barred.

In the writ proceedings, the assessee asserted that it was entitled to invoke Notification No. 53/2023-Central Tax, which would regularise the delayed appeal, provided the conditions of that notification were fulfilled.

Payment of Additional 2.5% Pre-Deposit

A key factual element highlighted by the assessee’s counsel was:

• When the appeal was originally filed before the appellate authority, the assessee had not paid the additional 2.5% of the disputed tax mandated by the notification.
• Subsequently, however, the assessee remitted the additional 2.5%, and evidence of this payment was produced as Ext.P7.