appeal time limit after rectification application rejection

[SUSHIL BANSAL]

Dear experts,

against order in original we can either file appeal or file rectification application. both the options can not be exercised simultenously. suppose we have filed rectification application and our application rejected. now we want to file appeal. plz guide whether we can file appeal against the order in original or we are left with option to file appeal against rectification rejection order & now the time limit will start from the date of rejection ?. plz guide

[Sadanand Bulbule]

Filing a rectification application under Section 161 of the CGST Act does not forfeit the right to appeal. However, it does not automatically extend the deadline for appealing the original order. If rectification is granted, a new limitation period begins for the modified portions. If it is rejected, the limitation period for filing an appeal under Section 107 against the original order typically continues from the initial date of service of Order in Original.

[KASTURI SETHI]

Time-period consumed in issuance of rectification order has to be excluded.  See Madras High Court judgment TMI ID 762560. The High Court has held that the period of limitation for challenging Assessment Order shall start ticking from the date of rejection of the rectification application i.e. the date on which rectification had been dismissed. 

[Sadanand Bulbule]

The Hon’ble Madras High Court (Madurai Bench) in SPK and Co. v. State Tax Officer [2024 (12) TMI 140 - MADRAS HIGH COURT], ruled that the limitation period for filing an appeal against an adjudication order begins from the date of the rectification order, not the original order. 

Despite many FAAs are not accepting ratio of judgement [supra] on pretext that, deliberately to generate more time to file an appeal under Section 107 which requires pre-deposit, taxpayers make [mis] use of Section 161 on the last leg of expiry of period to file appeal. Further many FAAs do not consider the judgements of other State High Courts.

Anyway, it is always safer to be on the protective side.
 

[SUSHIL BANSAL]

Sir,

suppose department does not accept the period wasted in rectification process, & We filed rectification application after 75 days of the OIO  then whether we are left with 15 days more to file appeal against the OIO after rejection of the rectification application. plz correct me if wrong.

[KASTURI SETHI]

Dear Querist,

You are right.

You can go ahead. Your statutory right cannot be snatched. If any High Court judgment is to be challenged, that is done with the approval/permission from CBIC. No jurisdiction issue regarding the High Court judgment. CBIC takes final decision with approval from Ministry of Law, Govt. of India.

You must be aware of the status of any High Court judgement whether accepted by the department or not. Judicial Discipline  has to be followed by all the Appellate Authorities. Adjudicating Authorities etc. as per judgement of Hon'ble Supreme Court.                          

AI Summary

GST rectification applications may pause or reset appeal limitation depending on authority acceptance, so file protectively. Filing a rectification application does not forfeit the right to appeal, but authorities differ on whether time consumed in rectification is excluded from the limitation period. A High Court ruling is cited holding that the limitation for appeal runs from the rectification order (including rejection) rather than the original order. Due to inconsistent acceptance by appellate authorities, taxpayers are advised to adopt a protective approach to preserve appeal rights when rectification proceedings have occurred.