GST compensation cess refund claims rejected, appeals time-barred after one year delay without justification

The Chhattisgarh HC dismissed writ petitions challenging the rejection of GST compensation cess refund claims and the validity of Clause 5 of Notification No. 53/2023. The petitioner-company's appeals were filed with a delay of over one year without adequate justification. The court held that Clause 5, which bars appeals for demands not involving tax, was validly enacted to address delays in appeal filing due to communication issues with web portal uploads. The petitioner failed to demonstrate how the clause was ultra vires the Constitution. The appeals were time-barred and the company could not benefit from the notification's time extension provisions.

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Issues Involved:
1. Challenge to the Order dated 05.12.2023.
2. Constitutional validity of Clause 5 of Notification No. 53/2023.

Summary:

Challenge to the Order dated 05.12.2023:

The petitioner challenged the order dated 05.12.2023 passed by the Joint Commissioner (Appeals) State Tax, Bilaspur, which rejected the petitioner's appeal on the grounds of delay. The petitioner argued that the order rejecting the refund application was not communicated to them until they received a physical copy on 07.08.2023. Consequently, the appeal was filed within the prescribed time limit from the date of communication. The petitioner contended that the term 'communicated' under Section 107(1) of the CGST Act should be interpreted as the date on which the physical copy was received, not the date of uploading on the portal. The court, however, found no error in the order passed by the respondent No. 4, observing that the appeal was filed after a delay of 1 year and 1 month from the prescribed time limit without any cogent reason.

Constitutional Validity of Clause 5 of Notification No. 53/2023:

The petitioner also sought to quash Clause 5 of the impugned Notification No. 53/2023, arguing that it created hostile discrimination and was arbitrary, thereby violating Article 14 of the Constitution of India. Clause 5 of the Notification states that no appeal shall be admissible in respect of a demand not involving tax. The petitioner contended that this clause discriminates between taxpayers with a tax demand and those without, despite both being similarly situated. The court, however, held that the petitioner failed to provide cogent reasons to declare Clause 5 ultra vires the Constitution. The court affirmed that the clause clearly states that no appeal would lie under this Notification in respect of a demand not involving tax, and the petitioner's appeal was rightly dismissed on the ground of limitation.

Conclusion:

All writ petitions were dismissed, with the petitioner being at liberty to approach the Appellate Tribunal or the learned Single Judge, if so advised.

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