LIMITATION PERIOD FOR APPEAL SHOULD BE CALCULATED ON THE DATE OF REJECTION OF RECTIFICATION NOT DATE OF ORDER IN ORIGINAL- MADRAS HIGH COURT
In GST Act when a demand order passed against any tax payer, there are two remedy available with him. First he can file Appeal against this order U/S 107 and second he can avail the facility of Rectification U/S 161. Many tax payer before file an appeal wants to exercise the rectification facility, because if they get relief in rectification then no need to go in to the Appeal.
But there are some lacuna in this if the result of rectification is not in the favour of Assessee and after that the time limit for filing an appeal is also not Available.
The Hon’ble Madras High court has counter this problem and held that the calculation of ime period starts with the date of rectification order, not the date of Order in original.
Section 107(1) r w 107 (4) explains the time period for filing an Appeal.
The facts of the Judgement:
This Writ Petition has been filed challenging the impugned demand order dated 19.08.2024 and consequential impugned order of rejection of rectification dated 22.11.2024 and to consequently directing the respondent to reconsider and rectify based on the petitioner's explanation dated 18.11.2024 in the light of the provisions of Section 161 of the Central Goods and Services Tax Act.
The respondent while passing the order of assessment had not dealt with the issue in a proper manner and had not given any reasons as to why the demand made in the show cause notice was affirmed.
Hence, a rectification application had been filed before the respondent and again the same had been rejected without assigning any reasons. Therefore, he prays this Court to set aside the order impugned in the Writ Petition.
The learned counsel for the petitioner would submit that the appellate authority would insist on calculating the period of limitation from the date when the original assessment order was passed and in such case, the appeal would be much beyond the period of limitation and would apprehend that the appeal would not be entertained as it is being made beyond the period of limitation.
After assessment order has been made, Section 161 of the GST Act provides for an application to be made for rectification. Such rectification can be disposed either in favour of the assessee or against him.
If any rectification is made as prayed for, the same would get merged into the original order. Just because the rectification application has been rejected, the period of limitation to challenge the original assessment order cannot be said to begin from the date on which the original order was passed, it would only count from the date on which the order of rectification has been passed.
Held That In the present case, the original order of assessment was made on 19.08.2024 and the order in rectification was made on 22.11.2024.
Therefore, the period of limitation for challenging the order of assessment dated 19.08.2024 shall start ticking from the date of rejection of the rectification application i.e., from 22.11.2024. It is made clear that when the appeal is filed by the assessee as against the original order of assessment, the period of limitation shall be calculated from the date on which the rectification had been dismissed.
MADRAS HIGH COURT
Sri Ramajeyam Engineering Industries V/S The Deputy Commissioner (ST), Thanjavur
16.12.2024
