2023 (12) TMI 1403 - HC - GST

Statutory Appeal Delay Pardoned: Genuine Misinterpretation of Time Limit Accepted, Merit-Based Review Ordered Under Finance Act, 1994

Lansun Logistics Versus Commissioner (Appeals-II), Additional Commissioner Chennai

The SC examined a statutory appeal delay under the Finance Act, 1994. Despite filing 21 days beyond the prescribed period, the court found the ... Condonation of delay of 21 days in filing the appeal before the first respondent/Appellate Authority - time limit for filing an appeal - HELD THAT:- This Court finds that since the order dated 30.03.2023 passed by the second respondent has provides 3 months time for preferring appeal, the petitioner was under the wrong impression that they can file the appeal within 3 months plus 30 days in addition, (in the event of any delay) from the date of receipt of the order 30.03.2023. But, however, the Act only provides for 2 months, which is exclusive of one month grace time for the delay, if any. Therefore, reasons assigned by the petitioner for preferring the Appeal with delay is appears to be genuine and reasonable, inasmuch as, the petitioner got confused over the time limit prescribed under the Statute, (which is only two months) and the time limit prescribed by the second respondent/Authority which is three month's, inclusive of one month delay period. Therefore, this Court is inclined to set aside the impugned order dated 27.09.2023. Conclusion - This Court finds that since the order dated 30.03.2023 passed by the second respondent has provides 3 months time for preferring appeal, the petitioner was under the wrong impression that they can file the appeal within 3 months plus 30 days in addition. The impugned order is set aside and the first respondent is directed to take the Appeal on record and dispose of the Appeal on merits. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions addressed in this judgment are:Whether the petitioner was justified in filing the appeal with a 21-day delay beyond the prescribed statutory period.Whether the Appellate Authority has the discretion to condone the delay in filing the appeal beyond the statutory period as per the Finance Act, 1994.Whether the petitioner's interpretation of the time limit for filing an appeal was reasonable based on the information provided in the Order-in-Original.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Justification for the 21-day delay in filing the appealRelevant legal framework and precedents: The relevant legal framework is Section 85 of the Finance Act, 1994, which prescribes the time limits for filing an appeal.Court's interpretation and reasoning: The court recognized that the petitioner was under the impression that the appeal could be filed within three months, with an additional 30-day grace period for delay. This misunderstanding arose from the language used in the Order-in-Original.Key evidence and findings: The court noted the timeline provided by the petitioner, which showed that the appeal was filed 21 days beyond the prescribed period.Application of law to facts: The court applied the statutory time limit of two months, plus a one-month grace period, and found that the petitioner's interpretation was a genuine mistake.Treatment of competing arguments: The respondents argued that the Appellate Authority lacks the power to condone any delay beyond the statutory period. The court acknowledged this but focused on the petitioner's reasonable misunderstanding.Conclusions: The court concluded that the petitioner's reasons for the delay were genuine and reasonable, warranting the setting aside of the impugned order.Issue 2: Authority to condone the delayRelevant legal framework and precedents: The Finance Act, 1994, limits the Appellate Authority's power to condone delays to a total of three months (two months plus a one-month grace period).Court's interpretation and reasoning: The court acknowledged the statutory limits but emphasized the petitioner's misunderstanding due to the language of the Order-in-Original.Key evidence and findings: The court found that the petitioner's delay was based on a reasonable interpretation of the Order-in-Original.Application of law to facts: The court applied the statutory limits but found that the petitioner's misunderstanding was reasonable.Treatment of competing arguments: The respondents maintained that the Appellate Authority cannot condone delays beyond the statutory period, which the court accepted but found the petitioner's case to be exceptional.Conclusions: The court directed the Appellate Authority to accept the appeal and adjudicate it on merits, considering the petitioner's reasonable misunderstanding.3. SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: 'This Court finds that since the order dated 30.03.2023 passed by the second respondent has provides 3 months time for preferring appeal, the petitioner was under the wrong impression that they can file the appeal within 3 months plus 30 days in addition.'Core principles established: The court established that a genuine misunderstanding of statutory limits, based on the language of an official order, can justify setting aside a refusal to entertain an appeal filed with a delay.Final determinations on each issue: The court allowed the writ petition, set aside the impugned order, and directed the Appellate Authority to take the appeal on record and dispose of it on merits, after providing an opportunity for personal hearing to the petitioner.