2023 (7) TMI 877 - HC - GST

Technical Portal Glitches Can't Block Tax Appeals: Section 107 Ensures Uninterrupted Right to Challenge GST Assessments

Savita Oil Technologies Ltd. and Savita Polymers Ltd. Versus The Union of India & Ors.

Savita Oil Technologies Ltd. and Savita Polymers Ltd. Versus The Union of India & Ors. - 2023 (76) G.S.T.L. 25 (Bom.) ISSUES PRESENTED AND CONSIDERED 1. Whether an intimation issued in Form GST DRC-05 constitutes an appealable order under Section 107 of the Central Goods and Services Tax Act, 2017. 2. Whether a statutory right of appeal may be rendered ineffective by a lacuna in the electronic filing portal that prevents filing of appeals against Form DRC-05 intimations. 3. Whether, pending rectification of the electronic portal, the appellate authority is obliged to accept and admit appeals filed manually against intimations in Form DRC-05, and whether such admission can be permitted without raising limitation objections. ISSUE-WISE DETAILED ANALYSIS Issue 1: Appealability of Form DRC-05 Intimations under Section 107 CGST Act Legal framework: Section 107 of the CGST Act provides the statutory right to appeal from specified orders passed under the Act. The matter centers on whether an intimation issued in Form DRC-05 falls within the class of orders which the legislature intended to make appealable under Section 107. Precedent Treatment: The Court's decision does not rely on or cite binding precedents regarding the specific classification of Form DRC-05 as appealable; instead the Court addresses the issue on the statutory text and the factual posture. Interpretation and reasoning: The Court examined Section 107 in light of the Form DRC-05 intimations received by the petitioners and accepted the uncontroverted concession by the Revenue that the intimations are appealable. The Court reasoned that the substance of the intimations and the statutory scheme support the petitioners' legitimate right to pursue an appeal. Ratio vs. Obiter: The conclusion that a Form DRC-05 intimation is an appealable order is treated as ratio insofar as it forms the basis for the remedy granted; it is necessary to the Court's disposition. Conclusion: The Court concluded that intimations in Form DRC-05 are appealable under Section 107 and that the petitioners possess a legitimate right to file appeals against those intimations. Issue 2: Effect of Electronic Portal Lacuna on the Right of Appeal Legal framework: Principles enforcing statutory remedies require that procedural or administrative mechanisms (including electronic filing systems) do not nullify substantive statutory rights. The CGST regime contemplates electronic filing but does not permit procedural mechanics to extinguish the right of appeal. Precedent Treatment: No precedents were applied or distinguished in the Court's reasoning; the approach is grounded in statutory interpretation and fundamental principles that statutory rights must not be rendered illusory by administrative or technical impediments. Interpretation and reasoning: The Court held that the absence of an e-portal window for lodging appeals against DRC-05 intimations cannot be allowed to deprive parties of an appellate remedy. The Court characterized such a result as arbitrary and contrary to the statutory scheme. The Court emphasized that where the portal's structure prevents filing, the remedy remains available and must be facilitated by other means until the portal is corrected. Ratio vs. Obiter: The holding that a software/design lacuna cannot extinguish a statutory right and that administrative mechanisms must accommodate such rights is ratio for the relief ordered; observations about arbitrariness and temporary solutions are directly consequential to the decree. Conclusion: The Court determined that the lacuna in the electronic filing portal cannot render the statutory right of appeal illusory and that administrative authority must provide an alternative means to protect that right. Issue 3: Obligation to Accept Manual Filing Pending Electronic Rectification and Limitation Consequences Legal framework: Administrative authorities must provide effective access to statutory remedies; courts may direct interim arrangements (including manual filing) to prevent denial of rights. Limitation objections are procedural defenses that can be waived or forestalled where petitioners pursue remedies in good faith and are prevented by administrative impediments. Precedent Treatment: The Court did not cite precedents addressing the precise remedy; the directive follows accepted equitable and supervisory jurisdiction principles under Article 226 to ensure effective exercise of statutory rights. Interpretation and reasoning: The Court directed that, until the portal is appropriately modified to accept electronic appeals against DRC-05 intimations, the appellate authority must accept appeals filed manually. The Court relied on the lack of any substantive objection from the Revenue to the filing of appeals (e.g., limitation, jurisdiction) and on the petitioners' bona fide attempts to use the e-portal. The Court framed manual acceptance as a stopgap remedial measure necessitated by the technical deficiency and as consistent with the statutory right to appeal. Ratio vs. Obiter: The directive to accept manual filings and to entertain such appeals without objection as to limitation (if filed within the period specified by the Court) is ratio: it is the operative relief granted. Comments about expectations from the Revenue to file an affidavit indicating a long-term solution are incidental but directly related to the remedy (primarily dispositive rather than purely obiter). Conclusion: The Court directed the appellate authority to accept manual appeals until the portal is fixed and ordered that appeals filed within two weeks of the order be entertained and adjudicated on merits without objection on limitation grounds. Ancillary Observations and Cross-References 1. The Court emphasized that no substantive objection (limitation, jurisdiction, etc.) existed against the petitioners' entitlement to appeal; this factual circumstance underpinned the permissibility of manual filing (see Issue 1 and Issue 3). 2. The Court required the Revenue to set out, by affidavit, not only the technical difficulties but also proposed solutions, indicating an expectation of administrative remediation while the interim manual route remains available (relates to Issue 2 and Issue 3). 3. The relief granted is prospective and remedial: it preserves the petitioners' right to appeal and mandates a temporary administrative accommodation pending correction of the electronic portal (connects Issues 2 and 3).