The Hon’ble High Court of Allahabad vide its order dated 16.01.2023 in the matter of M/s Yash Kothari Public Charitable Trust Vs. State Of U.P. And 2 Others in Writ Tax No. – 1027 of 2022, held that the Authorities cannot deny to entertain the appeal filed offline when due to mistake of the department or the technical glitch in software, the appeal filed by the assessee is not reflecting on the Portal.

The assessee filed the writ petition before the Hon’ble Court claiming relief for quashing correspondence dated 30.06.2022 issued by the Respondents requiring the petitioner assessee to furnish acknowledgment of online filing of appeal.

Facts of the Case: –

• That the assessee is a registered public charitable trust and duly registered under the Societies Registration Act and also under Section 12-AA of the Income Tax Act, is constructing a charitable hospital and certain exemption was claimed by the assessee, which was not granted while passing the assessment order dated 12.01.2022 (order No. ZD090122015905M).
• The assessee after the passing of said order reversed certain input tax credit through Form GSTR- 3B, which was filed on 08.02.2022. Thereafter, the department on 12.01.2022 passed a summary order under Rule 142(5) of the UP GST Rules, 2017.
• That the assessee in the meantime had tried to file appeal online against the original order which was not accepted and the web-portal displayed error. The assessee also preferred an appeal online against the summary order being order No. ZD090122015958B, however, the portal of the department reflected that the order number entered is already under appeal or appeal order has been passed.  Further, if the error continues, please call GST help desk or log your on Grievance Redressal Portal for GST and quote error number.
• Pursuant to which, 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.
• That the Authorities on 19.04.2022 passed a rectification order under Section 161, pursuant to which the recovery proceeding was initiated against the assessee on 21.04.2022. The Additional Commissioner, Grade-II (Appeals)-1, Commercial Tax, Kanpur on 28.04.2022 asked the assessee to submit the acknowledgement of appeal filed online.

Petitioner’s Submissions: –

• It was submitted on the behalf of the petitioner that the online portal of the department is not accepting the appeal filed by the assessee against the Order in original and the department is insisting for placing the acknowledgment of the appeal filed online and is not accepting the appeal filed offline.
• It was further contended that Section 107 of the CGST Act, provides for the filing of appeal against the order passed under the Act. According to him, Rule 108 provides for procedure and appeal to Appellate Authority is to be filed in Form GST APL – 01 along with relevant documents either electronically or otherwise as may be notified by the Commissioner.  Though, till date the Commissioner has not notified the other method through which an appeal could be filed.
• Referring to clause 2(80) wherein the word ‘notification’ has been defined which means a notification published in the Official Gazette and the expression ‘notify’ and ‘notified’ should be construed accordingly. Therefore, once the Commissioner has not made any notification or the State Government has issued any notification notifying the other mode of filing an appeal, then the appeal filed offline cannot be denied by the department.
• Further, it was contended that there is no denial to the paragraph no. 32 of the petition wherein assessee has taken a stand that ‘till date no such notification has been issued by the Commissioner notifying the same in the Official Gazette.’
• Reliance was placed on the decision of Andhra Pradesh High Court in case of Ali Cotton Mills Vs. Appellate Joint Commissioner (ST) – 2022 (56) G.S.T.L. 270 (A.P.), wherein it was held that ‘So till the Chief Commissioner specifies one particular mode of filing, the concerned appellant can choose to file the appeal either electronically or otherwise i.e., manually. In that view, the interpretation of the 1st respondent that since the Chief Commissioner has not given notification that the manual filing of the appeal can be accepted by the appellate authority, the appellant cannot file the appeal in manual form is contrary to the purport of Rule 108(1) of AP GST Rules, 2017’
• To further, strengthen its contention reliance was also placed on the decision of Division Bench of this Court in W.P.No.9324 of 2019, dated 01.08.2019, wherein it has held that “Having regard to the facts and submissions and as the case of the petitioner requires adjudication on merits and when substantial justice is pitted against technical considerations, it is always necessary to prefer the ends of justice, we are of the considered view that the request of the petitioner merits consideration. Such course also would help the petitioner in having his cause decided on merits.”

Respondents’ Submissions: –

• It was submitted on the behalf of the Respondents that that the order which the assessee wants to challenge before the Appellate Authority in shape of original order No. ZD090122015905M only records the finding as to the demand and penalty and the summary order under Rule 142 (5) of UP GST Rules. According to him, the reference number of the said order is ZD090122015958B and the appeal against the said order has already been preferred by the assessee but he is not placing the acknowledgement slip before the authorities for its due consideration.
• It was contended that the word “notified” used in Rule 108 does not mean any notification which is to be issued by the Commissioner but it is a circular which Commissioner has issued in respect of filing of an appeal.
• Further it was submitted that in the present case, the appeal filed by the assessee against the summary order was maintainable and the assessee has not placed before the Appellate Authority acknowledgment slip due to which the appeal was not being heard and decided.
• Reference was made to the circular issued by the Commissioner, Commercial Tax, U.P. dated 11.08.2022 wherein the problem of technical glitches in filing of appeal was discussed by the Commissioner and a direction was issued to all the Appellate Authorities through-out the State to get the matter resolved through the IT Cell and entertain the appeal online.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that the short question for consideration before this Court is that whether due to the mistake of the department or the technical glitch in software when an appeal of assessee is not reflected on the portal, whether the authorities can deny to entertain the appeal filed offline on technical grounds.
• It was found by the Hon’ble Court that this is a case where the Taxing Authorities of the State are contesting tooth and nail up till this Court preventing the assessee from consideration of his appeal offline though, prima facie, it is clear that the appeal filed by the assessee is not being reflected on the web-portal of the department. Besides, the department is trying to justify its stand that an appeal will lie against a summary order passed in DRC-07 under Rule 142(5) of the Rules and not against the original order, which was passed under Section 74 of the Act being order No. ZD090122015905M.
• That in terms of Section 107 of the Act, 2017, the legislature has not put any embargo upon filing of an appeal before the Appellate Authority by a person aggrieved, against any order.
• The contention raised on the behalf of the respondents that an appeal against order passed under Rule 142(5) that is a summary order, cannot be accepted by this Court, As the legislature has used the word “any person aggrieved by any decision or order passed under this Act”. The order dated 12.01.2022 being order No. ZD090122015905M has been passed by the Adjudicating Authority and the assessee if aggrieved by that order cannot be stopped from challenging the order before the Appellate Authority. The act of the respondents in not entertaining the appeal offline is an act from stopping the assessee from getting his right adjudicated as provided under the Act.
• Moreover, the Rule 108 provides for the procedure laid down for filing of an appeal clearly envisages situation where the appeal has to be filed electronically i.e,. online. It further provides that appeal can also be filed otherwise as may be notified by the Commissioner. In the State of Uttar Pradesh, the Commissioner has not notified other mode of filing an appeal before the first Appellate Authority.
• It was found by the Hon’ble Court that in the counter affidavit filed by the respondents there is no denial to paragraph 32 of the writ petition, which states that ‘not other method has been notified by the Commissioner for filing the appeal other than electronic mode.’ Further the contention raised on the behalf of the respondents ‘that the Commissioner has issued a circular’ does not hold ground as the word ‘notification' has been defined in Section 2(80) of the Act, which means a notification published in the official gazette and the expression ‘notify' and ‘notified' shall be construed accordingly.
• It was found that There is absolute clarity by the legislature as to the notification which has to be published by the State Government in the official gazette. Once no such notification has been issued, it would be presumed that other mode of filing the appeal would be offline.
• Further, the view taken by the Division Bench of Andhra Pradesh High Court in Ali Cotton Mill (Supra) interpreting Rule 108 to the extent that in case of notification not issued by the Chief Commissioner, it will be presumed that other mode is only through offline. Therefore, it was found by the Hon’ble Court that the taxing authorities cannot stop any assessee from claiming his statutory right, as provided under this Act in the garb of technicality.

The Hon’ble Court with the above findings, set aside the correspondence dated 30.06.2022 issued by the respondents.  The Additional Commissioner, Grade-II (Appeals)-1, Commercial Tax, Kanpur, is hereby directed to consider the appeal of the assessee filed offline strictly in accordance with law within a period of one month from the date of presentation of a certified copy of this order before him.