JUNE 25, 2021

By Makarand P S Joshi

CENTRAL Goods and Services Tax Act, 2017 (the Act) and the Central Goods and Services Tax Rules, 2017 (the Rules) provide for remedies in the form of Appeal.

In terms of Section 107(1) of the Act, an Appeal has to be filed within three months from the date on which the decision or the order appealed against is communicated to an assessee. The Appellate Authorities can condone the delay of maximum period of one month.

Thus, if an Order dated 01.01.2021 is served on the party on 01.01.2021, then the Appeal has to be filed on or before 01.04.2021, i.e. within the normal period of three months. The Appellate Authority can condone delay maximum up to one month, as per Section 107(4) of the Act. Therefore, Appeal can at the most be filed on 01.05.2021. Any Appeal filed after 01.05.2021 cannot be entertained by the Appellate Authority.

Rule 108 of the Rules is reproduced for ready reference:

RULE 108. Appeal to the Appellate Authority. - (1) An appeal to the Appellate Authority under sub-section (1) of section 107 shall be filed in FORM GST APL-01*, along with the relevant documents, either electronically or otherwise as may be notified by the Commissioner, and a provisional acknowledgement shall be issued to the appellant immediately.

(2) The grounds of appeal and the form of verification as contained in FORM GST APL-01* shall be signed in the manner specified in rule 26.

(3) A certified copy of the decision or order appealed against shall be submitted within seven days of filing the appeal under sub-rule (1) and a final acknowledgement, indicating appeal number shall be issued thereafter in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf:

Provided that where the certified copy of the decision or order is submitted within seven days from the date of filing the FORM GST APL-01*, the date of filing of the appeal shall be the date of the issue of the provisional acknowledgement and where the said copy is submitted after seven days, the date of filing of the appeal shall be the date of the submission of such copy.

Explanation. - For the provisions of this rule, the appeal shall be treated as filed only when the final acknowledgement, indicating the appeal number, is issued.

The term "certified copy" has been used in the Rules (Rule 108 to Rule 111) but has not been defined either in the Act or in the Rules. This term was also used in CE (Appeals) Rules, 2001 but not defined. Rule 2(f) of the CESTAT (Procedure) Rules, 1982 defines Certified Copy to mean original copy of the Order or a photocopy duly authenticated by the concerned department.

Rule 108 mandates that a Certified Copy of the decision or order appealed against (hereinafter referred to as "Certified Copy") shall be submitted within seven days of filing Appeal. In case, an Appeal is filed without Certified Copy, only a provisional acknowledgement of filing Appeal, is to be issued. When Certified Copy is submitted subsequently, then only a final acknowledgement of filing Appeal is to be issued indicating Appeal Number.

The Rule further provides that if a Certified Copy is submitted within seven days from the date of filing an Appeal, the date of filing of the Appeal shall be the date of the issue of the provisional acknowledgement (i.e. date of filing the Appeal). Whereas, in case where the certified copy is submitted beyond seven days, the date of filing of Appeal shall be the date of the submission of the Certified Copy. Appeal shall be treated as filed only when the final acknowledgement, indicating the appeal number, is issued.

If Appeal is filed within a period of three months or within further condonable period of one month, but Certified Copy of the Order is submitted even beyond the condonable period (i.e. beyond 01.05.2021, as per example above), the Appellate Authority will not entertain such Appeal and the Appeal will be considered as time barred. Though, an empty formality of hearing may be granted to dismiss the Appeal.

This would be strictly within the four corners of the Rule. Stand taken by the Appellate Authority will be supported by the Judgment of the Hon'ble Supreme Court in Singh Enterprises V. CCE, Jamshedpur - 2007-TIOL-231-SC-CX wherein it was held that the Appellate Authority has no power to entertain an appeal filed beyond the condonable period of limitation prescribed in the Statute. Not only that, but it was also held by the Apex Court that the High Court or the Supreme Court also will not be able to condone such delay in exercise of their extra ordinary jurisdiction.

Thus, the consequence of non-submission of a Certified Copy will be as if no Appeal was filed and the Order appealed against will reach finality on the issues decided therein, be it taxability, classification, valuation, etc. and most importantly neither the Appellate Tribunal (which is non-existent presently) nor the High Court nor the Supreme Court will be able to help the assessee. All the doors of Justice will be closed for ever.

The above situation arose before the Hon'ble Orissa High Court in case of Shree Udyog V. Commissioner of State Tax Odisha, Cuttack - 2021-TIOL-1369-HC-ORISSA-GST and wherein it is held that interest of justice ought not to be constrained by a hyper technical view of the requirement that a Certified Copy should be submitted within one week from the filing appeal, more particularly in these COVID times.

If the Lawmakers thought it to be so important, then why is it that neither any procedure has been prescribed nor any Circular has been issued on the subject of obtaining a Certified Copy.

Non-submission of a Certified Copy is a defect that can be cured. GST Law should be modified to authorise an Appellate Authority not to hear any Appeal where a Certified Copy has not been submitted. A provision can also be introduced to issue a Notice to an Appellant requiring him to submit a Certified Copy. For that matter, a provision authorising the Appellate Authority to impose certain amount of cost or fine can also be introduced for failure to submit a Certified Copy. But permanent closure of gates of Justice, is unreasonably harsh and arbitrary.

Next point that arises here is whether a provision of law which in effect would extinguish the right of appeal, of an assessee, for a petty and that too a curable defect, should remain in the Statute? This provision, therefore, aptly deserves to be deleted retrospectively.

This provision (rule 108(3)) is beyond the rule making power of the sub-ordinate legislature. When the Act itself has not put any such restriction, the procedural Rules cannot impose such unreasonable restriction. Inasmuch as the rule is ultra vires section 107 of the Act, 2017.

Ease of doing business should begin with doing away with provisions that act as stumbling blocks.

[The views expressed are strictly personal.]