2025 (2) TMI 342 - HC - GST

Court Quashes Order, Cites Flawed Procedure; Urges Liberal Interpretation of Limitation Statutes for Genuine Hardship Cases

M/s. Ashoka India Corporation & Anr. Versus Assistant Commissioner of Revenue, State Tax, GST, Ballygunje Charge & Ors.

The Court quashed the appellate order dated May 30, 2024, finding it procedurally flawed for rejecting the appeal without considering the application for ... Appeal preferred after payment of the whole amount of disputed tax - appellate authority erred in rejecting the appeal due to a delay in filing without considering an application for condonation of delay or not - HELD THAT:- Upon a thorough examination of the documents presented to the Court and taking into account the arguments put forth by the parties, this Court allows the writ petition as statutory provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated, particularly, in light of judicial precedents supporting such relief. The rejection of the appeal, therefore, lacked due consideration of these facts. While the petitioner acknowledges missing the extended deadline under Notification No. 53/2023 due to unawareness of the earlier appeal’s rejection, the delay was not deliberate. In light of the procedural irregularities and the arbitrary nature of the actions, this court finds the petitioner’s case to be meritorious. Accordingly, the writ petition is allowed and the appellate order dated May 30, 2024 is quashed. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment are:1. Whether the appellate authority erred in rejecting the appeal due to a delay in filing without considering an application for condonation of delay.2. Whether the statutory provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated.3. Whether the payment of the disputed tax amount negates the requirement for a pre-deposit at the time of filing the appeal.ISSUE-WISE DETAILED ANALYSIS1. Rejection of Appeal Due to DelayThe relevant legal framework involves Section 107 of the Act of 2017, which governs the filing of appeals and the associated time limits. The Court considered whether the provisions of Section 5 of the Limitation Act, 1963, which allows for the condonation of delay, were applicable. The Court noted that Section 107 does not expressly or impliedly exclude the applicability of Section 5 of the Limitation Act. The precedent set in the case of S. K. Chakraborty & Sons Vs. Union of India was crucial, where it was held that Section 5 of the Limitation Act could be invoked due to the absence of a non-obstante clause in Section 107.The Court reasoned that the rejection of the appeal lacked consideration of the possibility of condoning the delay, especially since the petitioner demonstrated genuine hardship and the delay was not deliberate. The Court found that the appellate authority should have considered the application for condonation of delay before rejecting the appeal.2. Interpretation of Statutory Provisions on LimitationThe Court emphasized a liberal interpretation of statutory provisions on limitation in cases of genuine hardship. This approach aligns with judicial precedents that advocate for flexibility in procedural timelines to ensure justice is served. The Court acknowledged that the petitioner was unaware of the earlier appeal's rejection and acted in good faith, which justified a more lenient interpretation of the limitation period.3. Requirement of Pre-depositThe Court examined whether the payment of the entire disputed tax amount negated the requirement for a pre-deposit. The petitioner had already paid the disputed tax amount, as evidenced by the debit from the electronic credit ledger. The appellate authority's rejection on the grounds of non-payment of the required pre-deposit was found to be arbitrary, as the petitioner had complied with the financial obligations by paying the full disputed amount.The Court applied the law to the facts by recognizing that the petitioner's appeal petition clearly indicated that no pre-deposit was required, as the entire disputed amount had been settled. The Court found that the appellate authority's decision was procedurally irregular and unsupported by the facts presented.SIGNIFICANT HOLDINGSThe Court held that the rejection of the appeal was procedurally flawed due to the failure to consider the application for condonation of delay. The Court emphasized that statutory provisions on limitation should be interpreted liberally in cases of genuine hardship, citing the precedent set in S. K. Chakraborty & Sons Vs. Union of India.The Court concluded that the payment of the entire disputed tax amount negated the requirement for a pre-deposit, and the appellate authority's decision to reject the appeal on these grounds was arbitrary. The appellate order dated May 30, 2024, was quashed, and the Appellate Authority was directed to consider the application for condonation of delay on its merits. If the explanations for the delay were found to be sufficient, the delay should be condoned, and the appeal should be heard and disposed of on its merits.The Court's decision underscores the importance of procedural fairness and the need to accommodate genuine hardships within the legal framework. The judgment serves as a reminder that legal processes should not become barriers to justice, especially when parties have demonstrated compliance with financial obligations and acted in good faith.