2020 (12) TMI 791 - HC - GST

Dismissed writ petition as time-barred under TSGST Act Section 161; Limitation Act doesn't apply.

The court dismissed the writ petition, ruling that the petition under Section 161 of the TSGST Act was time-barred, and the Superintendent of State Tax ... Rectification of error apparent on the face of record - limitation on rectification under special statute - complete code/express exclusion of Limitation Act by special statute - applicability of Section 5 of the Limitation Act via Section 29(2) - clerical or arithmetical error exception to limitation - authority to condone delay under statutory scheme - rectification of tax invoice versus rectification of orders/noticesRectification of error apparent on the face of record - complete code/express exclusion of Limitation Act by special statute - applicability of Section 5 of the Limitation Act via Section 29(2) - Whether the adjudicating authority could entertain and condone the petition under Section 161 of the TSGST Act filed after the statutory period and whether the Limitation Act (Section 5) could be invoked by application of Section 29(2). - HELD THAT: - The Court examined Section 161 which provides a three-month period for bringing apparent errors to the authority's notice and a first proviso barring rectification after six months, with a second proviso excepting purely clerical or arithmetical errors. The Court held that Section 161 constitutes a self-contained code for rectification and, by its terms and scheme, implicitly excludes the operation of the Limitation Act for the purpose of condoning delay. Accordingly, the authority had no power to condone the petitioner's delay by invoking Section 5 of the Limitation Act through Section 29(2). The Court relied on authorities holding that applicability of the Limitation Act to proceedings under a special statute depends on the scheme of that statute and whether the statute excludes or incorporates the Limitation Act's provisions; it concluded that TSGST Act's Section 161 manifests an exclusion of the Limitation Act's condonation machinery. Therefore the petition filed after the six-month bar could not be entertained on grounds of limitation. [Paras 36]The petition under Section 161, filed after the statutory period, could not be condoned by invoking Section 5 of the Limitation Act; Section 161 is a complete code and bars rectification after six months except for clerical/arithmetical errors.Clerical or arithmetical error exception to limitation - rectification of tax invoice versus rectification of orders/notices - authority to condone delay under statutory scheme - Whether the error alleged (invoice bearing wrong name though correct GSTIN) amounted to a clerical/arithmetic error under the proviso to Section 161 and whether Section 161 applied to rectify the tax invoice in question. - HELD THAT: - The Court considered the nature of the alleged mistake and the scope of Section 161. It observed that the second proviso to Section 161 permits rectification beyond six months only where the correction is purely clerical or arithmetical arising from accidental slip or omission in decisions, orders, notices or other documents issued under the Act. The Court held that the rectification sought related to a tax invoice issued by the principal (Bharati Hexacom Ltd.) and not to an order, decision or notice issued by an authority under the TSGST Act; further, the claimed mistake was not of a kind covered by the proviso. Consequently, the adjudicating authority correctly declined to treat the matter as a clerical/arithmetic error under Section 161 and rightly refused rectification on that basis. [Paras 6, 36]The alleged invoice error did not qualify as a clerical or arithmetical error under Section 161 and Section 161 does not permit the adjudicating authority to rectify such an invoice after the statutory period.Final Conclusion: The Court dismissed the writ petition, upholding the adjudicating authority's refusal to entertain the time-barred rectification petition under Section 161 of the TSGST Act and concluding that the Limitation Act could not be invoked to condone the delay; no order as to costs. Issues Involved:1. Validity of the show cause notice dated 10.10.2018.2. Legality of the order dated 15.11.2018 imposing tax, interest, and penalty.3. Rejection of the petition under Section 161 of the TSGST Act for rectification of errors.4. Applicability of Section 5 of the Limitation Act to condone delay under Section 161 of the TSGST Act.Detailed Analysis:1. Validity of the Show Cause Notice Dated 10.10.2018:The petitioner, a sole proprietorship firm, challenged the show cause notice dated 10.10.2018 on the grounds of defects/errors. The notice was issued under Section 74(1) of the TSGST Act, alleging wrongful utilization of Input Tax Credit (ITC) amounting to Rs. 20,03,893.80. The petitioner argued that the tax invoices were erroneously prepared by Bharati Hexacom Limited in the name of M/s Kiran Enterprise instead of M/s New Kiran Enterprise.2. Legality of the Order Dated 15.11.2018:The order dated 15.11.2018, passed by the Superintendent of State Tax, imposed tax, interest, and penalty on the petitioner for availing wrongful ITC. The petitioner contended that the two firms, M/s Kiran Enterprise and M/s New Kiran Enterprise, although having the same PAN, had separate GST numbers and dealt in the same products. The respondent argued that the taxpayer wrongly availed ITC of Rs. 20,03,893.80 and imposed a penalty equivalent to the tax amount along with interest under Section 74(1) of the TSGST Act.3. Rejection of the Petition Under Section 161 of the TSGST Act:The petitioner filed a petition under Section 161 of the TSGST Act for rectification of the error in the tax invoice, asserting that the tax invoices were erroneously prepared by Bharati Hexacom Limited. The petition was filed after the expiry of the six-month period prescribed under Section 161. The Superintendent of State Tax rejected the petition, stating that no rectification could be done after the prescribed period unless it involved a clerical or arithmetical error.4. Applicability of Section 5 of the Limitation Act:The petitioner argued that Section 5 of the Limitation Act should apply to condone the delay in filing the petition under Section 161 of the TSGST Act. The court examined whether the Superintendent of State Tax had the authority to condone the delay. It was held that the TSGST Act is a complete code in itself, and the Limitation Act does not apply to proceedings under the TSGST Act. The court referred to various judgments, including Mukri Gopalan vs. Cheppilat Puthanpurayil Aboobacker and M.P. Steel Corporation vs. Commissioner of Central Excise, to conclude that Section 5 of the Limitation Act does not apply to statutory authorities or tribunals unless expressly provided by the special statute.Conclusion:The court dismissed the writ petition, holding that the petition under Section 161 of the TSGST Act was time-barred and the Superintendent of State Tax had no authority to condone the delay. The court also held that the rectification sought was not covered by Section 161 of the TSGST Act, and the Limitation Act does not apply to proceedings under the TSGST Act. The court emphasized that when a legal action is barred by limitation, no decision can be rendered on merit.