COVID-19 lockdown constitutes sufficient cause for condonation of delay in GST appeal filing under Section 74

The Orissa HC held that COVID-19 lockdown constituted sufficient cause for condonation of delay in filing an appeal under GST law. The petitioner received a Section 74 order on 06.03.2020 and was required to file appeal by 05.06.2020, but filed on 13.11.2020. The court noted that the three-month limitation period expired during peak COVID-19 restrictions when lockdown was imposed from 24.03.2020, creating impediments to filing. Considering the pandemic's impact and related judicial precedents, the HC ruled the appellate authority should have condoned the delay. Petition allowed.

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Issues Involved:
1. Rejection of appeal by the Appellate Authority due to delay in filing.
2. Application of COVID-19 pandemic-related extensions to the limitation period for filing appeals.
3. Interpretation of judicial and quasi-judicial proceedings in the context of extensions granted by the Supreme Court.

Issue-Wise Detailed Analysis:

1. Rejection of Appeal by the Appellate Authority Due to Delay in Filing:
The petitioner challenged the rejection of their appeal by the Additional Commissioner of State Tax (Appeal), Balasore. The appeal was filed against an order dated 06.03.2020 issued under Section 74(9) of the Odisha Goods and Services Tax Act, 2017 (OGST Act). The appeal was filed on 13.11.2020, beyond the prescribed period under Section 107(1) and (4) of the OGST Act. The Appellate Authority noted that the appeal should have been filed by 05.06.2020 and rejected it due to the petitioner’s lack of diligence and inactivity.

2. Application of COVID-19 Pandemic-Related Extensions to the Limitation Period for Filing Appeals:
The petitioner argued that the Appellate Authority failed to consider the impact of the COVID-19 pandemic, which led to the Supreme Court’s order in Suo Motu Writ Petition (Civil) No. 3/2020 extending the limitation period from 15th March 2020 until further orders. The Supreme Court’s order aimed to address the difficulties faced by litigants due to the pandemic. The High Court acknowledged that the pandemic and lockdown measures imposed significant impediments for the petitioner to file the appeal within the original timeframe.

3. Interpretation of Judicial and Quasi-Judicial Proceedings in the Context of Extensions Granted by the Supreme Court:
The High Court examined the Supreme Court’s orders and various government notifications extending deadlines for judicial and quasi-judicial proceedings. The Court noted that the term “proceedings” includes legal processes to enforce rights and is applicable to appeals, reviews, and revisions under GST law. The Court referred to the clarification issued by the Central Board of Indirect Taxes and Customs (CBIC) and the State Government, which confirmed that the extensions granted by the Supreme Court apply to appeals and other quasi-judicial proceedings.

Conclusion:
The High Court concluded that the petitioner’s delay in filing the appeal should have been condoned due to the unprecedented circumstances caused by the COVID-19 pandemic. The Court set aside the order dated 31.12.2020 passed by the Additional Commissioner of State Tax (Appeal), Balasore, and directed the Appellate Authority to restore the appeal and adjudicate it on merits, adhering to the principles of natural justice. The Court clarified that its decision was limited to the issue of limitation and did not address the merits of the original order dated 06.03.2020 under Section 74 of the OGST Act.

Disposition:
The writ petition was allowed, and the Appellate Authority was directed to restore and hear the appeal on its merits, excluding the limitation issue.

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