Notification 53/2023 applies to eligible delayed GST appeals filed before 31 January 2024.

The petitioners, engaged in the supply of services, received a notice dated 07.09.2021 under Section 74 of the Central Goods and Services Tax Act, 2017 (“CGST Act”), alleging tax evasion.

They contended that the matter concerned only delayed filing of returns for five months and that the applicable tax, interest and penalty had subsequently been paid.

An order-in-original was passed under Section 74 on 27.01.2023 and its physical copy was served on 25.03.2023.

The petitioners filed an appeal under Section 107 on 28.12.2023.

In the meantime, the Central Government issued Notification No. 53/2023-Central Tax dated 02.11.2023 under Section 148, permitting specified delayed appeals to be filed up to 31.01.2024, subject to prescribed payment conditions.

The appellate authority rejected the petitioners’ appeal on 11.06.2024, holding that it lacked power to condone delay beyond the statutory period of 120 days under Section 107 read with Rule 108.

The petitioners challenged that order under Article 226 of the Constitution.

1. Whether Notification No. 53/2023-Central Tax dated 02.11.2023 applied to an appeal filed on 28.12.2023, before the notified cut-off date of 31.01.2024, even though the appeal had not been rejected for delay before issuance of the notification.

2. Whether the appellate authority erred in rejecting the appeal solely on limitation without considering the benefit and conditions of the notification.

3. Whether the petitioners were entitled to have their appeal restored for adjudication on merits upon fulfilling the payment conditions under paragraph 3 of the notification.

The Court applied Section 107 of the CGST Act, which governs appeals and prescribes the applicable limitation period and the appellate authority’s power to condone delay; Rule 108 of the Central Goods and Services Tax Rules, 2017, concerning the manner of filing appeals; and Section 148 of the CGST Act, under which the Central Government may prescribe special procedures for specified classes of persons.

Notification No. 53/2023-Central Tax dated 02.11.2023 created a special procedure for taxpayers whose appeals against orders under Sections 73 or 74 were not filed within limitation, including appeals pending or filed up to 31.01.2024, subject to payment of admitted dues and 12.5% of the disputed tax, with at least 20% paid through the Electronic Cash Ledger.

The Court also relied on the purposive object of the notification, as reflected in the GST Council’s 52nd meeting, and referred to Safal Developers & Anr. v. State of Gujarat & Anr., (2017) 99 VST 461.

The Court construed Notification No. 53/2023 purposively, in light of the GST Council’s concern that several appeals were either pending or liable to be rejected solely because of limitation, while taxpayers were willing to make the prescribed pre-deposit.

It held that the notification covered not only appeals already rejected for delay but also taxpayers who could not file within limitation, pending appeals, and appeals filed before the extended cut-off date of 31.01.2024, provided the conditions in paragraph 3 were satisfied.

Since the petitioners filed their appeal on 28.12.2023—before the notified cut-off—and had fulfilled the prescribed tax-payment conditions, excluding them merely because their appeal had not been rejected before 02.11.2023 would place them at a disadvantage compared with taxpayers whose delayed appeals had already been rejected.

The appellate authority was therefore required to consider the notification and could not reject the appeal solely on the basis of the ordinary limitation period.

Its failure to consider the notification rendered the impugned order unsustainable.

It held that Notification No. 53/2023-Central Tax applied to the petitioners’ appeal filed on 28.12.2023, subject to fulfilment of its conditions, and that the appellate authority erred in rejecting the appeal without considering the notification.

The writ petition was allowed; the impugned appellate order dated 11.06.2024 was quashed and set aside, and the matter was remanded to the appellate authority for decision on merits in accordance with law.

The appeal was directed to be decided within 12 weeks from receipt of the Court’s order.