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2023 DIGILAW 764 (KAR)

Bismilla Earth Movers v. State of Karnataka

2023-06-13

S.VISHWAJITH SHETTY

body2023
ORDER : 1. The instant writ petition under Articles 226 and 227 of the Constitution of India is filed assailing the order at Annexure-D dated 03.06.2023, passed by the 2nd respondent in proceedings bearing T.No. 167/23-24. 2. Heard the learned counsel for the parties. 3. Facts leading to filing of this writ petition as revealed from the records narrated briefly are; the petitioner who is a proprietary concern, registered under the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the KGST Act of 2017’) and under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act of 2017’), is engaged in the business of excavation of earth at mining head and supplies trippers to iron factories situated in and around Sandur, Hospet and Bellary of Karnataka. The petitioner was issued with a Show Cause Notice under Section 65 of the KGST Act of 2017 by respondent No. 1 and in response to the said notice, petitioner had produced books of accounts/records and documents to the respondent No. 3 Office in connection with the audit proceedings. Respondent No. 3 after verifying all the records and books of accounts of the petitioner, had passed an order under Sections 73(9), 50(1) and 50(2) of the KGST Act of 2017 and Section 5(1) of the Integrated Goods and Services Tax Act, 2017. The said order was passed on 27.12.2022. Assailing the said order, the petitioner had filed an appeal under Section 107 of the KGST Act of 2017 before the 2nd respondent-Appellate Authority. The said appeal was filed on 25.05.2023. Since the said appeal was filed after a delay of 59 days, the 2nd respondent had dismissed the appeal at the stage of admission, on the ground that he has no power to condone the delay of 59 days. It is under these circumstances, the petitioner is before this Court. 4. Learned counsel for the petitioner submits that under Section 109 of the CGST Act of 2017, the Central Government is required to constitute, by notification, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority, and since the Appellate Tribunal is not constituted, he has preferred the writ petition. He submits that the 2nd respondent has erred in dismissing the appeal on the ground of delay since the petitioner had offered satisfactory explanation for the delay. He submits that the period of delay is negligible and therefore the Appellate Authority needs to be directed to consider the appeal on merits. In support of his arguments, he has placed reliance on the judgment passed by the High Court of Calcutta in WPA No. 2809/2022 disposed of on 09.01.2023 in the case of Suraj Mangar vs. Assistant Commissioner of West Bengal State Tax, Cooch Behar Charge and Others. 5. Per contra, learned AGA appearing for responding No. 1 submits that, when the statute does not empower the Appellate Authority to condone the delay beyond the prescribed period, the Courts cannot issue directions contrary to the statutory provisions. He submits that power to condone the delay beyond the prescribed period has been consciously not given to the Appellate Authority under Section 107 of the KGST Act of 2017. In support of his contention, he has placed reliance on the judgment of the Hon’ble Supreme Court in the case of National Spot Exchange Limited vs. Anil Kohli, Resolution Professional for Dunar Foods Limited in Civil Appeal No. 6187/2019 disposed of on 14.09.2021. 6. The petitioner being aggrieved by the order of respondent No. 3 dated 27.12.2022 vide Annexure-B, had preferred an appeal under Section 107 of the KGST Act of 2017 along with an application to condone the delay and the said appeal has been dismissed on the ground that the same is barred by limitation and the Appellate Authority has refused to condone the delay of 59 days caused in filing the Appeal, which is over and above the period of one month delay which the Appellate Tribunal could have condoned in exercise of its power under Section 107(4) of the KGST Act of 2017. 7. Section 107 of the KGST Act of 2017 reads as follows: “107. Appeals to Appellate Authority: (1) Any person aggrieved by any decision or order passed under this Act or the Central Goods and Services Tax Act by an Adjudicating Authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. Appeals to Appellate Authority: (1) Any person aggrieved by any decision or order passed under this Act or the Central Goods and Services Tax Act by an Adjudicating Authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. (2) The Commissioner may, on his own motion, or upon request from the Commissioner of Central tax, call for and examine the record of any proceedings in which an Adjudicating Authority has passed any decision or order under this Act or the Central Goods and Services Tax Act, for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order. (3) Where, in pursuance of an order under subsection (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the Adjudicating Authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application. (4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month. (5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed. (6) No appeal shall be filed under sub-section (1), unless the appellant has paid: (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him. (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed. (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed. (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed. (8) The Appellate Authority shall give an opportunity to the appellant of being heard. (9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable. (11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the Adjudicating Authority that passed the said decision or order: Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order: Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under Section 73 or Section 74. (12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision. (12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision. (13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed: Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year. (14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the Adjudicating Authority. (15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of Central tax or an authority designated by him in this behalf. (16) Every order passed under this section shall, subject to the provisions of Section 108 or Section 113 or Section 117 or Section 118 be final and binding on the parties.” 8. From a reading of the aforesaid provisions of law, it is clear that, the Appellate Authority has no power to entertain an appeal beyond the period of one month as stipulated under Section 107(4) of the KGST Act of 2017. Any person aggrieved by an order passed under the Act, is required to prefer an appeal before the Appellate Authority within a period of 3 months from the date on which the order is communicated to him. In exercise of the powers under Section 107(4) of the Act, delay of one month over and above the period of limitation prescribed under Section 107(1) of the Act, can be condoned by the Appellate Authority and not the delay which is beyond the period prescribed under Section 107(4) of the Act. The KGST Act of 2017 is a special law and a complete code by itself and from the reading of relevant provisions of the Act, it is clear that the provisions of the Limitation Act are excluded. The KGST Act of 2017 is a special law and a complete code by itself and from the reading of relevant provisions of the Act, it is clear that the provisions of the Limitation Act are excluded. Under the said context, it is relevant to quote Section 29(2) of the Limitation Act, which reads as follows: “29(2) Where any special or local law prescribes for any suit, appeal or application, a period of limitation different from prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law.” 9. A plain reading of Section 29(2), would make it resultantly clear that the limitation period prescribed by the special law will prevail over limitation period prescribed under the Schedule to the Limitation Act. It further states that the provisions contained in Sections 4 to 24 of the Limitation Act, will apply for determining the period of limitation only insofar as and to the extent to which they are not expressly excluded by such special or local law. Under the Limitation Act, there is no provision which deals with the subject matter of the appeals under the KGST Act of 2017 or CGST Act of 2017, it is only the said provision would cover the field, and the provisions of the Limitation Act cannot be borrowed. 10. In the case of Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur, (2008) 12 VST 542, Section 35 of the Central Excise Act has fallen for consideration before the Hon’ble Supreme Court. Section 35 of the Central Excise Act, reads as follows: “35. 10. In the case of Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur, (2008) 12 VST 542, Section 35 of the Central Excise Act has fallen for consideration before the Hon’ble Supreme Court. Section 35 of the Central Excise Act, reads as follows: “35. Appeals To Commissioner (Appeals) (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals) (hereinafter in this Chapter referred to as the Commissioner (Appeals)] within sixty days from the date of the communication to him of such decision or order: Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days. (2) Every appeal under this section shall be in the prescribed form and shall be verified in the prescribed manner.” 11. In the said case, the Hon’ble Supreme Court has observed that the Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of Statute are vested with jurisdiction to condone the delay beyond the permissible period provided under the Statute. The period upto which the prayer for condonation can be accepted is statutorily provided. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow it to be presented within a further period of 30 days. In other words, this clearly shows that the appeal has to be filed within 60 days but in terms of the proviso further 30 days time can be granted by the appellate authority to entertain the appeal. The proviso to subsection (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The proviso to subsection (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only upto 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act.” 12. In case of Nandan Steels and Power Limited, through its Director Manish Kumar Agarwal vs. State of Chhattisgarh, through the Secretary and Others, 2022 SCC Online Chh. 1428, the Division Bench of Chhattisgarh at Bilaspur, which was considering similar provisions of Chhattisgarh Goods and Services Tax Act, 2017 at paragraphs 12, 13 and 14 has held as follows: “12. It will be appropriate to take note of Section 29(2) of the Limitation Act, which reads as follows: 29(2) Where any special or local law prescribes for any suit, appeal or application, a period of limitation different from prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law.” 13. A reading of Section 29(2) would go to show that the section is divided into two parts, manifested by the expression “and.” The first part stipulates that the limitation period prescribed by the special law or local law will prevail over the limitation period prescribed in the Schedule to the Limitation Act. The second part of Section 29(2) of the Limitation Act ordains that the Sections 4 to 24 of the Limitation Act will apply for determining the period of limitation “only insofar as, and to the extent which, they are not expressly excluded by such special or local law. 14. CGST Act is a “special law” which prescribes a specific period of limitation in Sections 107(1) and 107(4), and therefore, the provisions of CGST Act will apply. 14. CGST Act is a “special law” which prescribes a specific period of limitation in Sections 107(1) and 107(4), and therefore, the provisions of CGST Act will apply. It is also to be noted that there is no provision under the Limitation Act dealing with the subject matter of appeal under the CGST Act.” 13. In the case of Assistant Commissioner (CT) LTU, Kakinada vs. Glaxo Smith Kline Consumer Health Care Limited, AIR 2020 SC 2819 , Section 31 of the Andhra Pradesh Value Added Tax Act, 2005 (for short ‘AP VAT Act’) has fallen for consideration. Section 31 of the AP VAT Act reads as follows: “Section 31. (1) Any VAT dealer or TOT dealer or any another dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed or proceeding recorded by an Additional Commissioner or Joint Commissioner or Deputy Commissioner, may within thirty days from the date on which the order or proceeding was served on him, appeal to such authority as may be prescribed: Provided that the appellate authority may within a further period of thirty days admit the appeal preferred after a period of thirty days if he is satisfied that the VAT dealer or TOT dealer or any other dealer had sufficient cause for not preferring the appeal within that period: Provided further that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces the proof of payment of tax, penalty, interest or any other amount admitted to be due, or of such, installments as have been granted, and the proof of payment of twelve and half percent of the difference of the tax, penalty, interest or any other amount, assessed by the authority prescribed and the tax, penalty, interest or any other amount admitted by the appellant, for the relevant tax period, in respect of which the appeal is preferred.” 14. In the said case, the Hon’ble Supreme Court has observed that, it is evident that the statutory appeal was required to be filed within 30 days from the date on which the order or proceeding was served on the assessee. In the said case, the Hon’ble Supreme Court has observed that, it is evident that the statutory appeal was required to be filed within 30 days from the date on which the order or proceeding was served on the assessee. If the appeal is filed after expiry of prescribed period, the appellate authority is empowered to condone the delay in filing the appeal, only if it is filed within further period of not exceeding 30 days and sufficient cause for not preferring the appeal within the prescribed time is made out. The Hon’ble Supreme Court further observed that the appellate authority is not empowered to condone delay beyond the aggregate period of 60 days as provided under Section 31 of the AP VAT Act from the date of service of order passed against the assessee. The Hon’ble Supreme Court observed that the AP VAT Act, is a special legislation within the meaning of Section 29 of the Limitation Act and, therefore the prescription with regard to the limitation has binding effect and the same has to be followed regard being had to its mandatory nature. It was also observed that there is a statutory command by the legislation as regards limitation and there is postulate that delay can be condoned for further period not exceeding 60 days. It is in this background, the Hon’ble Supreme Court had observed that if the petitioner chooses to approach the High Court after the expiry of limitation period provided under Section 31 of the AP VAT Act, the High Court cannot disregard the statutory period for redressal of the grievance and entertain the writ petition. 15. In the case of National Spot Exchange Limited (supra), wherein similar question fell for consideration, the Hon’ble Supreme Court at paragraph 9 has observed as follows: “9. It is true that in a given case there may arise a situation where the applicant/appellant may not be in a position to file the appeal even within a statutory appeal of limitation prescribed under the Act and even within a statutory period of limitation prescribed under the Act and even within the extended maximum period of appeal which could be condoned owing to genuineness, viz. illness, accident etc. However, under the statute, the Parliament has not carved out any exception of such a situation. illness, accident etc. However, under the statute, the Parliament has not carved out any exception of such a situation. Therefore, in a given case, it may cause hardship, however, unless the Parliament has carved out any expression by a provision of law, the period of limitation has to be given effect to. Such powers are only with the Parliament and the legislature. The courts have no jurisdiction and/or authority to carve out any exception. If the courts carve out an exception, it would amount to legislate which would in turn might be inserting the provision to the statute, which is not permissible.” 16. The Co-ordinate Bench of this Court in WP No. 47044/2013 disposed of on 06.02.2014 in the case of S. Naseer Pasha S/o Late Chota Sab vs. The Deputy Commissioner of Transports, wherein it was considering the similar provision under the Karnataka Motor Vehicles Taxation Act, 1957 at paragraph 25 has observed as follows: “25. The proposition has to be considered only with reference to Section 29 of the Limitation Act. Section 29 clearly mandates ‘Where any special or local law prescribes for any suit, apealor application a period of limitation oddiferent from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the provision of determining any period of limitation prescribed for any suit, appeal r application by any special or local law, the provisions contained in Sections 4 to 24(inclusive) shall apply only insofar as, and to the extent to which they are not expressly excluded by such special or local law.’ Thus it could be seen in the instant case, though Section 5 of the Limitation Act gives discretion to the appellate or revisional authority to condone the delay beyond the period prescribed in filing such appeal or revision, if sufficient cause is shown, Rule 31 and the amended provision of Rule 31 does not grant any discretion to the court and fixes a maximum of 30 + 30 days. In view of Section 29 of the Limitation Act, the period of limitation prescribed by the special law, i.e. Section 15 of the Act and Rule 31 and the amended provision of Rule 31 prevails and Section 5 gets excluded.” 17. In view of Section 29 of the Limitation Act, the period of limitation prescribed by the special law, i.e. Section 15 of the Act and Rule 31 and the amended provision of Rule 31 prevails and Section 5 gets excluded.” 17. From the aforesaid analysis of the matter, it is abundantly clear that respondent No. 2 has no discretion to entertain the appeal which is filed beyond the period of one month from the period of limitation prescribed under Section 107(1) of the KGST Act of 2017. In the resultant position, any appeal which is preferred beyond the period indicated under Sections 107(1) and 107(4) of the KGST Act of 2017, cannot be entertained by the Appellate Authority. The legal competence of the Appellate Authority is only to condone the delay of one month in addition to the period of limitation under Section 107(1) of the KGST Act and no more. 18. In the present case, admittedly there is a delay of 59 days over and above the period of one month which the Appellate Authority could have condoned in exercise of its power under Section 107(4) of the KGST Act of 2017. Under these circumstances, no exception can be taken against the order impugned in this writ petition passed by the 2nd respondent-Appellate Authority. Therefore, the writ petition challenging the said order cannot be entertained and accordingly the same is dismissed.