2025 (9) TMI 253 - HC - GST

Appeal revived as not time-barred after postal records show order obtained 17 Aug 2023; prior dismissal set aside

Liberty Oil Mills Limited Versus Joint Commissioner (Appeals Thane) GST & Central Excise, Mumbai & Ors.

HC allowed the petition, holding the appeal was not time-barred. The court found postal records and the appellant's conduct supported that the impugned ... Time limitation - dismissal of Petitioner’s appeal against the Assistant Commissioner’s order on the ground that it was filed beyond the prescribed period of limitation of three months and the condonable period of one month - HELD THAT:- The postal document shows some overwriting, giving the impression that only the four documents were delivered by the postal authorities and not the fifth document, which is the order dated 30 March 2023. Furthermore, the Petitioner’s conduct in appealing the 4th document, a decision made by the Assistant Commissioner on the same issue, also indicates that the Petitioner was not otherwise inactive. If the Petitioner had indeed received the 5th document, that is, the order dated 30 March 2023, along with the other four documents on 11 April 2023, there would have been no reason for the Petitioner not to have appealed it within the prescribed period of limitation. The Petitioner has gained no undue advantage in the matter. The record also shows that the Petitioner, upon coming to know that the order dated 30 March 2023 was made, immediately applied for a copy of the same and, upon its furnishing, instituted the appeal within less than a month. If all these circumstances are considered cumulatively, then we are inclined to accept the Petitioner’s case about the order dated 30 March 2023 not being served upon them on 11 April 2023, but that it was obtained by the Petitioner only on 17 August 2023. Thus construed, the appeal instituted by the Petitioner on 11 September 2023 could not have been said to be barred by the limitation prescribed under Section 107 of the MGST Act. The impugned order dated 27 January 2025 made by the Joint Commissioner (Appeals) set aside - the Petitioner’s appeal restored to the file of the Joint Commissioner (Appeals) for adjudication on merits and in accordance with law. All contentions of all parties on the merits are explicitly left open. ISSUES PRESENTED AND CONSIDERED 1. Whether the appeal filed on 11 September 2023 was barred by limitation under Section 107 of the Maharashtra Goods and Services Tax Act, 2017, having regard to the date of communication of the impugned order dated 30 March 2023. 2. Whether the appellate authority was justified in relying on the postal report to conclude service/communication on 11 April 2023 without granting an effective opportunity to the appellant to meet, challenge or rebut the postal report. 3. What standard of proof (test of preponderance of probabilities/circumstantial evidence) is appropriate for determining whether the order was communicated, and how that standard should be applied to the facts. 4. Whether the appeal should be remanded to the appellate authority for fresh adjudication on limitation/merits, and what ancillary directions (including costs) are appropriate. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Limitation under Section 107 MGST Act: Legal framework Legal framework: Section 107 MGST Act prescribes the time-limit for filing appeals and the limited condonable period; an appeal must be filed within the statutory period counted from communication of the order. Precedent Treatment: No precedent was cited or relied upon in the judgment. Interpretation and reasoning: The critical factual question is the date of communication of the order dated 30 March 2023. The Joint Commissioner (Appeals) held communication occurred on 11 April 2023 based on a postal report, which would render the appeal instituted on 11 September 2023 time-barred. The Court examined contemporaneous conduct (the appellant's prompt appeal against a closely dated 4th document received on 11 April 2023 and the lack of any appeal in respect of the 30 March order) and the circumstances of when the appellant actually obtained the copy (applied 16 August 2023, supplied 17 August 2023, appeal filed 11 September 2023). The Court found the cumulative facts more consistent with non-receipt of the 30 March 2023 order on 11 April 2023. Ratio v. Obiter: Ratio - where communication date is disputed and the postal report relied upon is open to question, contemporaneous conduct and timing of the appellant's steps (requesting copy, prompt filing after receipt) are relevant to determining whether the statutory limitation period has begun. Obiter - general statements about Section 107 applicability beyond the facts. Conclusion: Applying the preponderance of probabilities to the totality of evidence, the Court accepted that the appellant did not receive the 30 March 2023 order on 11 April 2023. Therefore the appeal filed on 11 September 2023 could not be held time-barred under Section 107 MGST Act. Issue 2 - Reliance on Postal Report and Right to Opportunity to Rebut Legal framework: Administrative and appellate fairness requires granting parties an effective opportunity to challenge material evidence on which adverse findings are based, particularly when such evidence determines jurisdictional/time-bar issues. Precedent Treatment: None cited. Interpretation and reasoning: The Joint Commissioner (Appeals) placed heavy reliance on a postal report annexed to the file. The Court observed that the postal annexure exhibited overwriting and produced ambiguity (suggesting Figure 5 overwrote Figure 4). The appellant's representative received the postal report late (23 December 2024) and the impugned order followed shortly (31 December 2024), leaving no adequate opportunity to dispute the report's correctness. Given that the impugned order turned on the postal report, procedural fairness required granting an effective opportunity to meet that report before drawing adverse inferences. Ratio v. Obiter: Ratio - where a decision materially relies on a postal report (or similar documentary evidence) that is produced late or contains ambiguities, the adjudicator must allow the affected party a fair opportunity to contest the report before making a final adverse finding. Obiter - observations as to specific defects in the particular postal annexure. Conclusion: The appellate authority ought to have afforded an effective opportunity to the appellant to address the postal report; failure to do so rendered the conclusion on communication and limitation unsustainable. Issue 3 - Standard of Proof: Preponderance of Probabilities and Application to Circumstantial Evidence Legal framework: In civil/admin tax appeals, disputed facts such as service dates are ordinarily resolved on a preponderance of probabilities; circumstantial evidence may be assessed under that standard. Precedent Treatment: The Court noted that the Joint Commissioner (Appeals) applied a test described as appreciating circumstantial evidence; no precedents were cited to alter the standard. Interpretation and reasoning: The Court accepted the use of the preponderance of probabilities test. It applied that test to the totality of circumstances: overwriting in the postal annexure, the appellant's prompt appeal against a related decision received on the same date, the appellant's immediate request for a copy only after receiving a later show cause, and the timeline showing appeal filed within a month of obtaining the copy on 17 August 2023. These factors cumulatively weighed in favour of non-receipt on 11 April 2023. Ratio v. Obiter: Ratio - where the documentary proof of service is ambiguous and contemporaneous conduct favors non-receipt, the preponderance test supports finding non-communication; the party entitled to the benefit of the doubt is the one whose access to appellate remedy would otherwise be defeated. Obiter - characterization of the Joint Commissioner's approach as 'appreciating circumstantial evidence.' Conclusion: The Court properly applied the preponderance of probabilities and concluded that, on balance, the appellant did not receive the order on 11 April 2023; hence limitation did not begin then. Issue 4 - Remedial Disposition, Directions and Costs Legal framework: Where jurisdictional/time-bar findings are vitiated by procedural unfairness or incorrect factual conclusions, the remedy is to set aside the impugned order and restore the matter for fresh adjudication on merits and in accordance with law, leaving substantive contentions open. Courts may also impose or direct costs by way of donations where appropriate and agreed. Precedent Treatment: No precedent cited. Interpretation and reasoning: Rather than remanding solely for the limited purpose of addressing the postal report, the Court, after hearing counsel and applying the preponderance test itself, concluded that the appeal was not time-barred and therefore restored the appeal to the appellate file for adjudication on merits. The Court accepted the appellant's volunteered donation of Rs. 25,000 to a government hospital as a measure of costs and directed compliance filing within specified timelines. Ratio v. Obiter: Ratio - where the appellate fact-finding on limitation is set aside for reasons of fairness and evidence, the appellate file should be restored for merits adjudication and ancillary directions (including reasonable costs/donations) may be made. Obiter - specifics of the hospital account and timelines. Conclusion: The impugned appellate order was set aside; the appellant's appeal was restored to the Joint Commissioner (Appeals) for adjudication on merits; all substantive contentions remained open. The appellant was directed to donate Rs. 25,000 to the specified government hospital and file compliance within the stipulated period.