Limitation Act And Tax Appeals | Allahabad High Court Rejects Application Under Limitation Act, Holds Tax Statue Will Prevail

The Allahabad High Court has rejected the application of Section 5 of the Limitation Act in appeals filed under Section 107 of the Uttar Pradesh Goods and Service Tax Act, 2017. The Court held that Tax laws are complete comprehensive codes which have strict procedural requirements to ensure revenue certainty and fiscal stability.

Section 107 of the UPGST Act provides a period of three months from the date of order to file an appeal challenging the same. Section 107(4) empowers the appellate authority to exercise discretion in condoning delay of up to one month in filing the appeal. Section 5 of the Limitation Act is a general provision which enables Courts to condone delay if sufficient cause is shown.

The Court held that Section 107 prescribes a time frame for filing of appeal to ensure timely adjudication and to promote “the efficient administration of GST regime” whereas Section 5 of the Limitation Act provides for condonation of delay in exceptional circumstances where sufficient cause is shown.

“In analyzing the conflicting interpretations concerning the exclusion of Section 5 of the Limitation Act as far as Section 107 of the GST Act is concerned, it is essential to consider the rationale behind the exclusion of the Limitation Act in certain special statues, particularly in the context of taxation. Tax laws are often characterized by strict procedural requirements and time-bound deadlines, reflecting the need for expeditious resolution of tax disputes to ensure revenue certainty and fiscal stability,” held Justice Shekhar B. Saraf.

Petitioner's appeal under Section 107 of the UPGST Act was dismissed on grounds of delay of 66 days. Relying on the decision of the Calcutta High Court in S.K. Chakraborty & sons vs. Union of India and others, counsel for petitioner argued that Section 5 of the Limitation Act applies to appeals under Section 107 of the UPGST Act as there is no express or implied exclusion of Section 5 of the Limitation Act.

The Court relied on it earlier decision in M/s Abhishek Trading Corporation v. Commissioner (Appeals) and another and Garg Enterprises v. State of U.P. and Ors, wherein Justice Saraf had held that

“The Central Goods and Services Act is a special statute and a self-contained code by itself. Section 107 of the Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite law that Section 5 of the Limitation Act, 1963 will apply only if it is extended to the special statute. Section 107 of the Act specifically provides for the limitation and in the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. Accordingly, one cannot apply Section 5 of the Limitation Act, 1963 to the aforesaid provision.”

The Court also referred to Penuel Nexus Pvt. Ltd. v. The Additional Commissioner Headquarters (Appeals) and Ors where the Kerala High Court held that Limitation Act does not apply to GST as it is a special statue and a self-contained code by itself.

The Court observed that Section 107(4) provides for an extra one-month period over the prescribed three months for filing an appeal under Section 107 of the UPGST Act. Since the petitioner had filed the appeal after 66 days of expiration of the three months prescribed for filing appeal, the Court held that the delay could not have been condoned by the Appellate Authority.

The Court held that

“Taxing statutes like the GST Act embody a comprehensive framework with specific limitation provisions tailored to expedite the resolution of tax-related matters. Section 107 of the GST Act, operates as a complete code in itself, explicitly delineating limitation periods for filing appeals and implicitly excluding the application of general limitation provisions such as Section 5 of the Limitation Act.”

Accordingly, the writ petition was dismissed.

Case Title: M/S Yadav Steels Having Office vs. Additional Commissioner And Another 2024 LiveLaw (AB) 112 [WRIT TAX No. - 975 of 2023]

Case Citation: 2024 LiveLaw (AB) 112

Also Read: Section 5 Of Limitation Act Does Not Apply To Section 107 Of CGST Act: Allahabad High Court

[Limitation Act] Allahabad High Court Extends Benefit Of Exclusion Of Time U/S.14 To Appeals Under S.107 CGST Act

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