GST update on whether AAAR empowered to condone delay beyond statutory time period? 130/2020-21

It is often observed that the appeal is not heard on merits for the sole reason that it was filed beyond the statutory time period prescribed in the Statue. If we talk of erstwhile indirect taxation regime, it was settled law that the appeal was required to be filed within the stipulated time period of 60 days/2months with one month condonation allowed by the Commissioner Appeals in exceptional cases. It was held that since the time period along with condonation period is explicitly stated in the Statue, the Commissioner Appeals was not empowered to condone delay beyond the stipulated period. However, in case of appeals before Tribunals, the power to condone delay was not limited and the length of delay does not matter if there were genuine reasons for not filing appeal within the stipulated time period. In GST era, the concept of advance rulings and filing of appeals before the Appellate Authority for Advance Rulings (AAAR) is new and so is the issue regarding the power to condone delay for appeal filed beyond the stipulated time period. This issue was recently dealt with in the case of THE DEPUTY CONSERVATOR OF FORESTS (GST AAAR KARNATAKA) [ORDER NO. KAR/AAAR-15/12019-20 DATED 03/03/2020], wherein the delay of one day beyond the prescribed period was not condoned. The decision pronounced is the subject matter of discussion of the present update.
The AAAR held that on a plain reading of the provisions of Section 100 of the said Act, it is apparent that the same mandates that an appeal should be filed within 30 days from the date of communication of the advance ruling order that is sought to be challenged. Moreover, it was stated that the Appellate Authority being a creature of the statue is empowered to condone delay only to the extent of 30 days after the expiry of the initial period for filing appeal, if it is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the initial period of 30 days. In other words, the total limitation period during which an appeal can be preferred before this Authority is 60 days from the date of communication of the advance ruling order, on showing sufficient cause.
The AAAR concluded that it is not empowered to condone the delay beyond 60 days because the language of proviso to Section 100 of the CGST Act uses the words ‘not exceeding thirty days’ thereby indicating that this Appellate Authority could not entertain appeal beyond the extended period given under the proviso. If it condoned the delay beyond 30 days, it would render the phrase ‘not exceeding thirty days’ wholly otiose which would not be in accordance with the principles of interpretation.

Reliance was also placed on decision rendered by the Supreme Court in the case of SINGH ENTERPRISES VS CCE reported as (2008) 3 SCC 70 rendered in terms of Section 35 of the Central Excise Act, 1944 which also provided specific time limit for filing appeal before the Commissioner Appeals and the specific time period of condonation. Similar decisions were given by the Supreme Court in case of CONSOLIDATED ENGINEERING ENTERPRISES VS PRINCIPAL SECRETARY, IRRIGATION DEPARTMENT AND OTHERS – (2008) 7 SCC 169 and COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VS HONGO INDIA (P) LTD – (2009) 5 SCC 791wherein it was pronounced that condonation of delay beyond specified time limit is not possible.

This is not the only decision wherein it was held that the AAAR cannot condone the delay beyond the prescribed period and rather similar decision was rendered in case of M/S DURGA PROJECTS & INFRASTRUCTURE PVT LTD VS KARNATAKA AAAR wherein it was held that AAAR could entertain the appeal beyond the extended period under the proviso to section 100 of CGST Act, 2017 as it would render the phrase “not exceeding thirty days” insignificant. Hence, the situation is similar to the erstwhile regime wherein there was strict view as regards the period of condonation by the Commissioner Appeals for the reason that appellate authority is creature of Statue and cannot go beyond what has been empowered by the Act. Hence, it is high time that the assessee realizes the importance of challenging the AAR orders within the prescribed time limit otherwise it may lead to situation of “no remedy” to them, particularly when there are contrary views on the issue.

This is solely for educational purpose.

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GST update on whether AAAR empowered to condone delay beyond statutory time period? 130/2020-21

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