Taxing Authorities Can't Stop Assessee From Claiming Statutory Right: Allahabad High Court

The Allahabad High Court has held that the taxing authorities cannot, in the garb of technicality, stop any assessee from claiming his statutory right, as provided under the Income Tax Act.

The bench of Justice Rohit Ranjan Agarwal has observed that, due to the mistake of the department or a technical glitch in the software, when an appeal of an assessee is not reflected on the portal, the department cannot deny the appeal filed offline on technical grounds.

The appellant/assessee is a registered public charitable trust constructing a charitable hospital, and certain exemptions were claimed by the assessee but not granted by the assessment order. After the passing of the order, the assessee reversed certain input tax credits through Form GSTR-3B. The department passed a summary order. The assessee, in the meantime, had tried to file an appeal online against the original order, which was not accepted, and the web portal displayed an error.

The assessee also preferred to file an appeal online against the summary order. The portal of the department reflected that the order number entered is already under appeal or that the appeal order has been passed. If the error persists, please call the GST help desk or log your issues on the Grievance Redressal Portal for GST and quote the error number.

The assessee moved a letter before the authority, making a complaint that the portal was not accepting the appeal against the order passed by the department. A rectification order under Section 161 was passed by the authorities, pursuant to which the recovery proceeding was initiated against the assessee on April 21, 2012. The Additional Commissioner had required the assessee to submit the acknowledgment of appeal filed online.

The petitioner submitted that the online portal of the department was not accepting the appeal filed by the assessee against the original order, and the department was insisting on placing the acknowledgment of the appeal filed online and not accepting the appeal filed offline.

Section 107 of the CGST Act, 2008, provides for the filing of an appeal against the order passed under the Act.

According to the petitioner, Rule 108 provides for the procedure and appeal to the Appellate Authority, which is to be filed in Form GST APL-01 along with relevant documents, either electronically or otherwise, as may be notified by the Commissioner. The Commissioner has not yet informed us of any other means by which an appeal could be filed.

The department contended that the assessee's appeal against the summary order was maintainable and that the assessee had failed to submit the acknowledgement slip to the Appellate Authority, resulting in the appeal not being heard and decided.As per the circular dated August 11, 2022, the problem of technical glitches in the filing of appeals was discussed by the Commissioner, and a direction was issued to all the appellate authorities throughout the state to get the matter resolved through the IT Cell and entertain the appeal online.

"There is absolute clarity by the legislature as to the notification that has to be published by the state government in the official gazette. Once no such notification has been issued, it would be presumed that another mode of filing the appeal would be offline," the court noted.

The court ordered the Additional Commissioner to hear the assessee's appeal, which was filed offline strictly in accordance with the law, within one month.

Case Title: M/S Yash Kothari Public Charitable Trust Versus State Of U.P. And 2 Others [WRIT TAX No. - 1027 of 2022]

Case Citation: 2023 LiveLaw (AB) 64

Date: 16.1.2023

Counsel For Petitioner: Nishant Mishra

Counsel For Respondent: C.S.C.

Click Here To Read The Order