Time barred appeal rejected by commissioner-grounds of appeal in GSTAT

[SUSHIL BANSAL]

Dear experts,

our client RC was cancelled stating non existent.the client is govt contractor & filing all returns. His accountant was having his login credentials & due to that he was not aware of Rc cancellation & other notices & the accountant did not convey him.after 9 months of RC cancellation the client came to know about the cancellation & that too he came to know when GST dept issued recovery notice (for other year dues)  to PWD (govt dept.) for which he was doing contractor work As the time limit to file appeal was over, we filed appeal taking the date of intimation the date on which recovery notice was given to pwd,accordingly appeal could be filed on portal.The appeal was admitted.Then within 10-15 days the commissioner gave us PH, we pleaded but he rejected the appeal saying the appeal being time barred & accordingly he did not go on merits of the case. Now we have to file appeal in GSTAT.Now our confusion is  what should be solid grounds.The client has affadavit of accountant that he was having his login credentails & the client lodged police complaint also against accountant.& the same were filed in commissioner appeal as well.

[YAGAY andSUN]

The impugned order rejecting the appeal as time-barred is unsustainable in law. Under Section 107 of the Central Goods and Services Tax Act, 2017, limitation for filing appeal commences from the date of communication of the decision or order. In the present case, the cancellation order was never effectively communicated to the appellant. Though allegedly uploaded on the common portal, the appellant had no actual knowledge, as login credentials were handled by the accountant, who failed to inform him. An affidavit of the accountant and a police complaint substantiate bona fides. In terms of Section 169, service must be effected in the prescribed manner, and mere portal uploading without effective communication cannot trigger limitation. Hence, the appeal filed from the date of knowledge (i.e., receipt of recovery notice issued to PWD) was within time.

Further, the Appellate Authority, after admitting the appeal and granting personal hearing, erred in mechanically dismissing it on limitation without adjudicating the jurisdictional fact of proper service. The authority failed to consider documentary evidence establishing absence of knowledge and sufficient cause. The cancellation on the ground of “non-existent” dealer despite continuous filing of returns and execution of Government contracts is arbitrary and violative of principles of natural justice. The impugned order reflects non-application of mind and failure to exercise jurisdiction vested in the authority. Accordingly, the order is liable to be set aside and the matter remanded for decision on merits, as limitation never validly commenced in the absence of proper service.

[Sadanand Bulbule]

I welcome the guidance of Yagay & Sun Sirs. Further you may consider the following, if need be:

The appeal before the Goods and Services Tax Appellate Tribunal may be sustained on the ground that the cancellation order was never effectively brought to the knowledge of the taxpayer, as GST compliance and portal access were handled by the accountant who failed to communicate the notices, which constitutes a bona fide and reasonable cause for delay. The taxpayer has consistently filed GST returns and continues to execute Government contract works, clearly disproving the allegation of being a non-existent taxpayer.

Further, once the appeal was admitted and personal hearing granted, rejection solely on limitation without examining merits reflects improper exercise of discretion. In the overall facts, the delay is neither deliberate nor negligent, and the matter warrants restoration of registration or consideration on merits in the interest of justice.

[KASTURI SETHI]

An assessee must not suffer due to the fault of Accountant.. Go deep and wide through the following case laws:-

(i)  2023 (11) TMI-450-Calcutta High Court

(ii) 1981 (4) TMI-255-SC

[KASTURI SETHI]

In continuation of above reply, the First Appellate Authority has no statutory power to condone the delay for more than one month. Your client can get relief from High Court or Supreme Court. 

[Shilpi Jain]

Pls approach High Court. Also, if you go through the GSTAT route, you never know when your case will get heard!

AI Summary

Effective service and limitation: appeal filed from date of actual knowledge where portal upload did not impart notice, merits require consideration. Challenge focuses on ineffective service by mere portal upload where the taxpayer lacked actual knowledge due to third party control of portal credentials; appeal filed from the date of effective knowledge (discovery via recovery notice) was admitted but later dismissed as time barred without adjudicating whether service was effective, despite supporting affidavit and police complaint showing bona fide delay and continuous compliance.