Limitation Period For GST Appeals Starts Only After Tribunal Becomes Functional: Chhattisgarh High Court

The Chhattisgarh High Court has held that the limitation period for filing appeals to the GST Appellate Tribunal (GSTAT) begins only once the Tribunal becomes functional, and allowed a Raipur-based construction firm to approach the Tribunal for its transitional input tax credit claim, while directing that statutory protection against recovery under Section 112(9) of the CGST Act will continue in the meantime.

Justice Naresh Kumar Chandravanshi passed the order in a writ petition filed by the construction firm, challenging an appellate order under the Chhattisgarh Goods and Services Tax Act, 2017, which had rejected its claim for transitional input tax credit.

The firm sought the quashing of the appellate order and remand of its claim for transitional credit on the basis of documents and invoices already submitted. It highlighted that although a second appeal lay before the GST Appellate Tribunal, the Chhattisgarh GSTAT had not yet become operational due to the non-appointment of its President or Members.

The firm relied on earlier High Court decisions and CBIC circulars, which clarified that the limitation period for filing appeals before the Tribunal commences only after the Tribunal becomes functional.

Taking note of the submissions and the stand of the State, which did not oppose the petition, the Court held that the petitioner could invoke the appellate remedy once the President or State President of the GST Appellate Tribunal assumed office.

The Court directed that upon filing of such an appeal with the requisite statutory deposit, the appellate authority shall decide the matter strictly in accordance with law. However, the Court noted that if the appeal is not filed within the prescribed limitation period after the Tribunal becomes functional, the State may initiate recovery proceedings in accordance with law. It held:

"It is made clear that if the appeal is not filed within the prescribed period of limitation, the State would be at liberty to proceed against the petitioner for recovery of remaining tax, interest and penalty, if any, in accordance with law."

It further clarified that the statutory stay on recovery under Section 112(9) CGST Act will continue until the disposal of the appeal and disposed of the writ petition without costs.