2023 (9) TMI 39 - HC - GST

Legal Appeal Reinstated: Technical Filing Barriers Overcome, Procedural Fairness Prioritized Over Strict Compliance

M/s. Rane Madras Ltd., Rep by S. Narayanan Versus The Assistant Commercial Tax Officer (Appeals), The Commissioner, Commercial Taxes Department

The SC allowed the writ petition challenging the rejection of an appeal due to technical filing issues. Technical glitches preventing electronic filing ... Rejection of appeal - delay in filing the appeal manually in absence of the proper instruction/guidelines and /or facility in the GST portal - HELD THAT:- The appeal that was filed by the petitioner manually on 12.06.2023 already complies with the requirements of the N/N. 29/2023-Central Tax dated 31.07.2023 barring the delay in filing the appeal in time as per Section 107 of the respective Goods and Service Tax Act, 2017. Since the clarification was issued for the first time only on 31.07.2023, the appeal filed by the petitioner prior to its issuance on 12.06.2023 has to be construed to have been filed in time. Therefore, the impugned order/communication of the 1st respondent is liable to be quashed. It is accordingly quashed. The second respondent is therefore directed to number the appeal filed by the petitioner on 12.06.2023 and dispose the same on merits and in accordance with law on its turn - Petition allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an appeal required to be filed electronically under the Rules can be rejected as time-barred where the appellant attempted electronic filing but the GST portal did not enable appeals against TRAN-1/2 orders. 2. Whether manual filing of an appeal after the statutory period but before a subsequent government notification permitting manual presentation can be treated as timely by reason of that later notification. 3. Whether a departmental communication rejecting an appeal on the ground of delay is sustainable where the taxpayer lodged complaints about portal incapacity and the portal helpdesk acknowledged non-availability of the functionality. 4. The appropriate remedy and consequential directions where an appeal filed manually in these circumstances was rejected without adjudication on merits. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Effect of portal incapacity on timeliness of electronically mandated appeals Legal framework: Rule 108(1) of the PGST Rules, 2017 prescribes electronic filing in specified FORM; Section 107(1) of the PGST Act, 2017 prescribes the three-month limitation for filing an appeal from communication of the order. Precedent treatment: The Court referenced the rationale underlying subsequent administrative directions (see Issue 2) which respond to similar practical difficulties; no contrary judicial precedent was applied or distinguished in the text. Interpretation and reasoning: Where the statutory/regulatory scheme mandates electronic filing but the electronic facility does not in practice permit filing of appeals against particular orders (TRAN-1/2), an attempt at electronic filing which fails due to portal incapacity cannot be held against the appellant. The factual finding that the taxpayer attempted electronic filing and lodged a complaint with the GST portal (which acknowledged that TRAN-1/2 appeals were not enabled) demonstrates that the statutory requirement could not be complied with despite bona fide effort. Ratio vs. Obiter: Ratio - inability of mandated electronic facility to accept appeals negates the reasonableness of rejecting an appeal as time-barred where the appellant attempted electronic filing and the fault lay with the portal. Obiter - observations on general administrative practice that all aggrieved persons filed electronically are not decisive given the portal admission of incapacity. Conclusion: Electronic filing requirement cannot be enforced mechanically where the electronic system itself does not permit filing; attempts and complaints evidencing such incapacity must be taken into account when considering timeliness. Issue 2 - Effect of later notification providing special procedure for manual presentation on appeals filed manually before that notification Legal framework: Power under Section 148 of the Central GST Act to notify special procedures; the notification provides that appeals presented manually in the specified form shall be treated as filed within time, and that appeals filed before issuance of the notification in accordance with Section 107 shall be deemed to have been filed in accordance with the notification. Precedent treatment: The notification was issued pursuant to directions of the Supreme Court in the matter referenced in the notification text; the Court treats the notification as a clarifying and remedial administrative measure directed at practical difficulties (the judgment text does not identify further case law distinguishing or overruling prior authorities). Interpretation and reasoning: The notification establishes a special procedure allowing manual presentation and specifies that time for filing shall be computed from the later of the order date or the notification date; critically, it also deems any appeal filed in accordance with Section 107 prior to the notification to be in compliance with the notification. Where a taxpayer filed a manual appeal prior to issuance of the notification because electronic filing was impossible, and that manual filing otherwise met the format and signing requirements set out in the notification, the manual appeal must be construed as compliant with the later notification. The notification thus operates to validate the manual presentation in these circumstances and to cure the procedural barrier caused by lack of portal functionality. Ratio vs. Obiter: Ratio - the notification's deeming provision and its remedial character mean a manual appeal filed before the notification (where filing electronically was not possible) is to be treated as filed in conformity with the special procedure; this precludes rejection on timeliness grounds if the manual filing otherwise met notification requirements. Obiter - commentary that no deposit under sub-section (6) of Section 107 is required as a precondition (a procedural clarification in the notification) is ancillary but practically significant. Conclusion: The notification validates earlier manual filings made in the context of portal incapacity; hence a manual appeal filed prior to the notification that complies with the notification's requirements must be treated as timely and properly filed. Issue 3 - Sustainability of departmental rejection where portal helpdesk acknowledged non-availability of functionality and taxpayer lodged complaints Legal framework: Administrative law principles require reasoned decisions and must take into account material facts such as representations and complaints made by taxpayers; statutory provisions (Section 107 and Rule 108) set filing mode and time limits but are subject to practical impossibility and remedial administrative action. Precedent treatment: The Court relied on contemporaneous administrative admissions (portal resolution message) rather than external case law to evaluate the reasonableness of departmental action. Interpretation and reasoning: The departmental communication rejecting the appeal rested on a strict application of Rule 108(1) and Section 107(1) without appreciating the portal's admitted inability to accept TRAN-1/2 appeals. Where the portal itself responded to the taxpayer complaint by stating the functionality was not enabled and that the issue had been taken up with policy authorities, the rejection for delay lacked factual foundation. Administrative denial that state tax authorities refused manual filing was not corroborated and cannot overcome the portal's admission of incapacity. The combination of attempted electronic filing, a logged complaint, and the portal's substantive reply negates the premise that the appellant unreasonably delayed. Ratio vs. Obiter: Ratio - a departmental rejection for delay is unsustainable where objective evidence shows the electronic channel mandated by rules was functionally unavailable and the taxpayer took reasonable steps (attempts and complaints) to comply. Obiter - observations regarding the denial by state authorities of refusal to accept manual filings are peripheral and do not justify rejecting the appeal when the portal itself disclaimed functionality. Conclusion: The departmental rejection on grounds of delay is untenable in light of the portal's admission and the taxpayer's attempts; the appeal should not have been dismissed for delay without considering these material facts. Issue 4 - Appropriate remedy and consequential directions when manual appeal was rejected Legal framework: Writ jurisdiction to quash administrative orders that are illegal or unsustainable; direction to adjudicatory authorities to number and dispose pending appeals in accordance with law, affording opportunity of hearing, are consistent with procedural fairness and appellate scheme in the statute. Precedent treatment: The judgment applies established remedial principles - quash and remit for fresh consideration - rather than invoking novel remedies. Interpretation and reasoning: Given that the manual appeal filed on 12.06.2023 complied with the later notification's requirements (except for timing which the notification cures), and the impugned communication rejecting the appeal was based on an incorrect premise, the proper remedy is quashing of the impugned order and directing the appellate authority to number and adjudicate the appeal on merits. The appellant must be heard before disposal, ensuring adherence to audi alteram partem. Ratio vs. Obiter: Ratio - quashal of the impugned rejection and direction to the appellate authority to number and decide the appeal on merits after hearing the appellant. Obiter - statement that no costs are ordered is ancillary procedural disposition. Conclusion: The impugned communication is quashed; the appellate authority is directed to number the manual appeal filed on 12.06.2023 and to dispose it on merits in accordance with law after hearing the appellant. The manual appeal is to be treated as validly filed in the circumstances described.