Limitation for tax appeal runs from rejection of rectification when that order is the operative communication, not the original order.

Limitation for an appeal under Section 85(3A) of the Finance Act, 1994 was held to run from communication of the operative order where rectification under Section 74 had been invoked and later rejected. The Commissioner (Appeals) had wrongly counted time from the original adjudication order instead of from the rejection of the rectification application. Because the appeal was treated as time-barred on an incorrect starting point, that dismissal was set aside and the matter was remanded for fresh adjudication on the correct limitation basis.

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Issues: Whether the appeal before the Commissioner (Appeals) was barred by limitation, and whether the limitation period had to be computed from the date of receipt of the order-in-original or from the date on which the rectification application under Section 74 was rejected.

Analysis: The limitation under Section 85(3A) of the Finance Act, 1994 is computed from the date of communication of the relevant order. The appellant had invoked rectification under Section 74 of the Finance Act, 1994, and the rejection of that application was communicated later. In these circumstances, the order passed on rectification was the operative order for counting limitation, and the earlier date adopted by the Commissioner (Appeals) was not correct. Since the appeal was treated as time-barred on an incorrect starting point, the dismissal could not be sustained.

Conclusion: The limitation period had to be reckoned from the date of receipt of the order rejecting rectification, not from the date of receipt of the original adjudication order. The dismissal for limitation was set aside and the matter was remanded to the Commissioner (Appeals) for fresh adjudication.

Final Conclusion: The appellant obtained restoration of the appeal for reconsideration on the correct limitation basis, and the impugned rejection was not sustained.

Ratio Decidendi: Where a rectification order is sought and rejected, the limitation for the appellate remedy may have to be computed from the communication of that operative rejection order if the earlier order is not the effective starting point for the appeal.

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