Appellate Authority directed to accept endorsement certificate filed during pending appeal citing COVID-19 constraints under Rule 112(4)

The AP HC allowed a petition seeking direction to the Appellate Authority to accept an endorsement certificate filed during pending appeal proceedings. The petitioner had not filed the endorsement certificate with the original refund application or the appeal, but submitted it later citing COVID-19 pandemic constraints. The court held that the petitioner could not have anticipated the pandemic situation within the two-year refund claim period. Relying on Rule 112(4) of CGST Rules and Section 107(11) of CGST Act, which empower appellate authorities to direct production of documents and conduct further inquiry, the court found circumstances justified accepting additional evidence at the appellate stage, particularly where due diligence was exercised but original filing was prevented by unforeseen circumstances.

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Issues Involved:
1. Validity of rejecting the appeal without considering endorsement certificates.
2. Compliance with statutory requirements for refund claims.
3. Acceptance of additional evidence (endorsement certificates) pending appeal.
4. Alleged violation of principles of natural justice and Article 14 of the Constitution of India.

Issue-Wise Detailed Analysis:

1. Validity of Rejecting the Appeal Without Considering Endorsement Certificates:
The Petitioner challenged the Order in Appeal No. VIZ-GST-000-APP-021-21-22, dated 30.07.2021, which rejected the appeal without considering the endorsement certificates filed by the Petitioner. The Petitioner argued that the rejection was illegal, improper, incorrect, and violative of Article 14 and 19(1)(g) of the Constitution of India. The Petitioner contended that due to the Covid pandemic, obtaining the endorsement certificates was delayed, and the authorities should have considered this difficulty.

2. Compliance with Statutory Requirements for Refund Claims:
The Petitioner, registered under the C.G.S.T. Act and A.P.G.S.T. Act, provided Express Courier Services to SEZ Units, which are zero-rated supplies. The Petitioner filed refund claims for the period April 2018 to March 2019 under Section 54 of the C.G.S.T. Act read with Rule 89 of the C.G.S.T. Rules. The Petitioner filed the refund claims within the extended time limit due to the Covid pandemic but without the endorsement certificates. The authorities issued a show cause notice for non-submission of the endorsement certificates and subsequently rejected the refund claims.

3. Acceptance of Additional Evidence (Endorsement Certificates) Pending Appeal:
The Petitioner obtained the endorsement certificates after filing the appeal and submitted them as additional material. The Appellate Authority rejected the appeal, stating that the endorsement certificates were not submitted within the specified time. The Petitioner argued that Rule 112 of the C.G.S.T. Rules allows for the acceptance of additional evidence if the appellant was prevented by sufficient cause from producing it earlier. The Court noted that the Petitioner had been diligently pursuing the endorsement certificates and that the Appellate Authority has the discretion to accept additional evidence in such circumstances.

4. Alleged Violation of Principles of Natural Justice and Article 14 of the Constitution of India:
The Petitioner argued that the rejection of the refund claims without considering the endorsement certificates violated the principles of natural justice and Article 14 of the Constitution. The Petitioner contended that the authorities did not provide an opportunity to explain the reasons for the delay in obtaining the endorsement certificates. The Court agreed that the Petitioner should have been given an opportunity to explain and that the rejection of the claims without considering the additional evidence was unjust.

Conclusion:
The Court allowed the Petitioner's request to accept the endorsement certificates and set aside the impugned Order dated 30.07.2021. The matters were remanded back to the Appellate Authority to reconsider the refund claims after accepting the additional evidence. The Court emphasized that the Appellate Authority has the discretion to accept additional evidence when sufficient cause is shown. The Writ Petitions were allowed, and the Appellate Authority was directed to deal with the matters afresh in accordance with the law. No order as to costs was made, and any pending interlocutory applications were closed.

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