The Tripura High Court in its recent ruling in the case of M/s Kiran Enterprise has held that the adjudicating authority has no right to rectify an error after the expiry of a period of more than three months. It was further held that Limitation Act will not apply in GST law.
Facts of the case:
- The petitioner, M/s Kiran Enterprise is the distributor of Airtel as engaged by Bharati Hexacom Limited for Dharmanagar jurisdiction.
- The petitioner has been engaged as the distributor, the petitioner is under obligation for making payment of all taxes, duties, levies, cess, search charge, or any other charges that may be applicable on the distributor or for prepaid/service offerings/ products, etc.
- According to the petitioner, the tax invoices used to be prepared by Bharti Hexacom Limited in the name of M/s New Kiran Enterprise, another proprietorship firm owned by the petitioner.
- The issue raised in this case was whether Section 5 qua Section 29(2) of the Limitation Act would apply for the purpose of condoning the delay in filing the petitioner‟s petition under Section 161 of the TSGST Act.
Order of Tripura High Court: Deliberation and Ruling
- Before we formulate our decision in respect of the question whether Section 5 qua Section 29(2) of the Limitation Act would apply for purpose of condoning the delay in filing the petitioner‟s petition under Section 161 of the TSGST Act, let us revisit the provisions of Section 161 of the TSGST Act.
- Let us highlight the provisions relating to the limitation. It provides that for purpose of any error which is apparent on the face of the record in the decision or the order or the notice or the certificate or any other documents issued by any authority, the said authority can exercise the said power to rectify either on own motion of the said authority or by the officers appointed under TSGST Act or CGST Act or by the affected person, if such action is taken within a period of three months from the date of such decision, or order or notice or certificate or any other documents as the case may be.
- The first proviso stipulates that no such rectification shall be done after a period of six months from the date of issue of such decision or order or notice or certificate or any other documents.
- The second proviso provides that the said period of six months shall not apply in such cases where the rectification is purely in the nature of correction of clerical or arithmetical error, arising from any accidental slip or omission.
- It is apparent on the face of the said provision [Section 161 of the TSGST Act] that this is a complete code within itself and it has impliedly excluded the Limitation Act. Thus, what has been observed by the Superintendent of Taxes in the decision communicated by the reply dated 17.12.2019 does not suffer from any infirmity.
- Moreover, the Limitation Act will not apply automatically unless it is extended to the special statute such as TSGST Act inasmuch as law in this regard is absolutely unambiguous that except in the case of the suit, appeal or application in the court, the limitation of Act will not apply/extend for the local or special statute.
In view of above deliberations the division bench of Justice S. Tala Patra dismissed the petitioner‟s contention in respect of the extension of the Limitation Act. Further it was held that in the considered view of this court, the rectification as sought is not covered by Section 161 of the TSGST Act.
The Court further held that when a legal action is barred by limitation unless that bar is overcome, no decision can be rendered on merit.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
