2023 (8) TMI 1092 - HC - GST

GST appeal dismissed as time-barred under sections 107(1) and 169 - three month limitation period expired after advocate received order

M/s Manoj Steel Traders Versus State of U.P. And 2 Others

The HC dismissed a petition challenging the dismissal of an appeal on limitation grounds. The court held that under sections 107(1) and 169 of the UP GST ... Maintainability of appeal - appeal dismissed on the ground of limitation - HELD THAT:- From the perusal of sections 107 (1) and 169 of the UP GST Act, it is evidently clear that the appeal against an order can be preferred within a period of three months from the date of communication. Section 169 (1)(a) of the UPGST Act provides that any decision, order, summons, notice or other communication shall be served by any one of the following methods, namely, by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person. Therefore, it is evident that the order communicated on an Advocate will be deemed service upon the petitioner. It is admitted that the order was passed on 28.03.2018 and the said order was duly communicated to the Advocate of the petitioner, namely, Shri Anil Jain. Once an order has been communicated on 28.03.2018, the limitation for filing an appeal within a period of three months ends in the last week of June, 2018. On perusal of section 5 application of the petitioner filed in support of the appeal, not a single word has been whispered as to how and in what method the petitioner came to know about the said order on 26.06.2019 and as to why the application was moved on 26.06.2019 by another counsel, when the order dated 28.03.2018 was already communicated to the petitioner's Advocate, namely, Shri Anil Jain. Once the Advocate, namely, Shri Anil Jain, was representing the petitioner before the respondent – Assistant Commissioner, State Tax, Mobile Squad, on which the order dated 28.03.2018 was served on the same day, i.e., on 28.03.2018, was not disputed at any stage and the only ground taken was that Shri Anil Jain, Advocate has not informed the petitioner about the order dated 28.03.2018. In view of these facts not being in dispute, the impugned order cannot be interfered with. Petition dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the first appeal was barred by limitation where the impugned order dated 28.03.2018 was communicated to the appellant's Advocate on the same date. 2. Whether service of the order upon the appellant's Advocate constitutes communication to the person aggrieved for the purpose of commencing the limitation period under section 107(1) read with section 169 of the UPGST Act. 3. Whether a bona fide mistake or failure on the part of the appellant's Advocate to inform the appellant of the order constitutes sufficient cause for condonation of delay in filing the appeal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Whether the first appeal was barred by limitation where the impugned order dated 28.03.2018 was communicated to the appellant's Advocate on the same date. Legal framework: Section 107(1) UPGST Act prescribes that an appeal to the Appellate Authority must be filed within three months from the date on which the decision or order is communicated to such person. Section 169 specifies modes of service and states that every decision, order or communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed as provided. Precedent Treatment: No prior judicial precedents were relied upon or discussed in the judgment. Interpretation and reasoning: The Court examined the record and found that the impugned order was passed on 28.03.2018 and was communicated on that date to the Advocate representing the taxpayer (Advocate Shri Anil Jain). Under section 169(1)(a), service by tendering directly to an advocate holding authority to appear on behalf of the taxable person is one of the specified modes. Section 169(2) deems service to have occurred on the date of tender. Ratio vs. Obiter: Ratio - where an order is communicated to an authorised advocate on the date of passing, the limitation under section 107(1) commences from that date and the appeal must be filed within three months therefrom. Observational/ancillary - discussion that the limitation would end in the last week of June 2018 in the facts of the case. Conclusion: The appeal filed on 26.06.2019 was beyond the three-month limitation period running from 28.03.2018; therefore the appeal was time-barred. Issue 2 - Whether service of the order upon the appellant's Advocate constitutes communication to the person aggrieved for the purpose of commencing the limitation period under section 107(1) read with section 169 of the UPGST Act. Legal framework: Section 169(1)(a) expressly includes service to an advocate or authorised representative as a valid mode of service. Section 169(2) deems service to have occurred on the date of tender or publication. Section 107(1) ties the limitation period to the date of communication to the person aggrieved. Precedent Treatment: No conflicting authority was considered; the Court relied on the plain language of the statute. Interpretation and reasoning: The Court applied the clear statutory language: service to an advocate is service to the taxable person because the advocate is an authorised representative and the statute contemplates service to an advocate as effective communication. Once the order was served on the Advocate on 28.03.2018, the statutory deeming provision fixed that date as the date of communication and the limitation clock began to run. Ratio vs. Obiter: Ratio - service on an authorised advocate is effective service on the taxable person for purposes of section 107(1) and triggers the commencement of the limitation period under the UPGST Act. Conclusion: Service upon the appellant's Advocate was valid communication; limitation for filing the appeal began on 28.03.2018. Issue 3 - Whether a bona fide mistake or failure on the part of the appellant's Advocate to inform the appellant of the order constitutes sufficient cause for condonation of delay in filing the appeal. Legal framework: The statutory scheme prescribes prescribed limitation; condonation of delay is a discretionary remedial device in appropriate cases but requires explanation and supporting material showing sufficient cause for delay. Precedent Treatment: No judicial authorities dealing with counsel's mistake as sufficient cause were cited or applied by the Court. Interpretation and reasoning: The petitioner contended that the local counsel did not communicate the order to the petitioner and that another counsel only obtained a certified copy and filed the appeal on 26.06.2019. The Court noted absence of any explanation in the application under section 5 (delay condonation) or in the appeal as to how or when the petitioner came to know of the order on 26.06.2019. The record admitted that the order had been served on the Advocate of record on 28.03.2018 and there was no dispute on that fact. The Court observed that a mere allegation that the counsel failed to inform the client, without supporting particulars or explanation as to why the mistake was not discovered earlier, does not constitute sufficient cause to excuse a delay of this length when statutory service has been effected upon an authorised representative. Ratio vs. Obiter: Ratio - unexplained failure by an authorised advocate to inform the client of an order, when the order was validly served on that advocate, does not, without credible explanation or supporting material, constitute sufficient cause for condonation of delay in filing a statutory appeal. Obiter - comment on the expectation that explanation must be set out in the condonation application (section 5 application) and supported by details. Conclusion: The plea of bona fide mistake by the appellant's Advocate lacked explanatory support and could not justify condonation; therefore the appellate authority's rejection of the delay condonation and dismissal of the appeal on limitation grounds was not interfered with. Cross-references and Consolidated Conclusion Service under section 169(1)(a) upon an Advocate of record is effective communication to the taxable person; section 169(2) deems such service to have occurred on the date of tender. Where an order is so served, the three-month limitation under section 107(1) begins from that date. A later discovery of the order by the taxpayer, without credible explanation why the authorised advocate's failure to inform the client was only discovered later, does not ordinarily amount to sufficient cause for condonation of delay. Applying these principles to the facts, the appeal filed well beyond the three-month period was time-barred and the writ petition challenging dismissal on limitation grounds lacked merit.