December 06, 2023

By Vijay Kumar

IN an order dated, 26 03 2013, the Madras High Court held.

However, if any appeal is filed by the appellant within a period of two weeks from today, the appellate authority is directed to consider the appeal and pass orders on merits and in accordance with law, within a period of three months from the date of filing appeal.

A copy of this order was received by the petitioner on 26 04 2013. The petitioner promptly filed the appeal on 29 04 2013 which was equally promptly dismissed by the appellate commissioner on the ground it was time barred. According to the Commissioner (Appeals), the appeal should have been filed by the petitioner within a period of two weeks from 26.03.2013 (the date on which the order was passed) and dismissed the appeal filed by the petitioner on the ground that it is barred by limitation.

So, as per the Commissioner (Appeals), the appeal should have been filed before 09 04 2013, but remember that on 9th April 2013, the petitioner didn't have a copy of the High Court's order. Would the Commissioner (Appeals) have accepted the appeal without a copy of the High Court's order?

Imagine the plight of the petitioner! He has to file the appeal before 9th April 2013 based on the order of the High Court but he had the copy of the High Court order only on 26th April 2013 and he filed the appeal promptly on 29th April 2013 but the learned appellate authority held that the appeal was barred by limitation. What is the solution?

Whenever the executive is unfair or unreasonable or when they interpret the law in such a way that it is impossible for a tax payer to get any intended benefit, the only option left to a harried taxpayer is to ring the bell in front of the High Court and that is what exactly our petitioner did.

In the High Court, the counsel for the Revenue argued that in the aforesaid order, it has been mentioned that the appeal should be filed by the petitioner within a period of two weeks from today, i.e., 26.03.2013 (the date of passing of the said order). However, since the petitioner had filed the said appeal only on 29.04.2013, the respondent had dismissed the appeal as it is barred by limitation.

The High Court observed; Micro Carbonates Pvt Ltd Vs Commissioner of Customs (Appeals) - 2023-TIOL-1597-HC-MAD-CUS

The only issue that has to be decided in the present case is as to whether the word "today" mentioned in the order refers to the date on which the order was passed or to the date on which the order was issued to the petitioner (i.e., the date on which the order was made ready).

This Court is of the considered view that the petitioner will be able to file the appeal only when the order copy is received by them, otherwise, the respondent will not entertain the appeal. Therefore, for all practical purposes, the word "today" in the order has to be construed as the date on which the order was ready to issue. In such view of the matter, the word "today" mentioned in the said order refers to the date on which the order copy was issued to the petitioner. Hence, in the present case, since the order copy was received by the petitioner only on 25.04.2013, the appeal, which was filed on 29.04.2013, was filed well within the period of limitation prescribed by this Court.

From the above discussion, the submission of the respondent that the impugned order, which was passed on the ground that the appeal is barred by limitation, is not sustainable. Hence, this Court is inclined to set aside the impugned order passed by the first respondent on the aspect of limitation.

As the High Court observed, the Commissioner would not have entertained the appeal if a copy of the High Court's order was not produced before him. He could have as well admitted the appeal and nothing would have happened to him, but he chose to be technically correct which caused another litigation in the High Court that lasted ten years. Who did it benefit?

What is a MONTH?

Recently there was a case in the Allahabad High Court wherein the court had to decide what a month is. - 2023-TIOL-548-HC-ALL-GST

The appeal instituted by the petitioner was dismissed on the ground that it was beyond maximum period, as prescribed under the statute i.e. four months. The appellate authority computed four months as each month would be of 30 days.

Section 107 of Goods and Services Tax Act, 2017 provides that an appeal, may be filed before appellate authority within the prescribed period of three months from the date on which the order is communicated to the person concerned. Sub-Section (4) of Section 107 of the Act, 2017 provides that the appellate authority may, if it is satisfied that the appeal was prevented by sufficient cause from presenting it within the period of three months, may allow it to be presented within a further period of one month.

The High Court observed,

Bare reading of the provisions of Section 107 of the Act, 2017 reflects that it is not 120 days, but it is four months and, therefore, it would depend upon the date on which date the adjudicating authority passes the order. The four months may be of 121 days or 122 days, as the case may be. In the present case, in four months, around 121 days come, and the appeal was filed on 121st day., the appeal has been summarily dismissed only on the ground that it was beyond 120 days, and not within 120 days.

The Standing Counsel for the government did not dispute either legal position or the factual position.

A Special Bench of the ITAT was called upon to decide this issue in 2014-TIOL-156-ITAT-AHM-SB. The issue referred to the Special Bench was,

"Whether for the purpose of Section 54EC of IT Act, 1961, the period of investment of six months should be reckoned after the date of transfer or from the end of the month in which transfer of capital asset took place?"

The ITAT Special Bench found that the term 'month' is not defined in The Income Tax Act; so, they examined the term "month" as per General Clauses Act, 1897 which says-

"Section 3 (35): "month" shall mean a month reckoned according to the British calendar".

The Tribunal wisely observed,

In British Calendar, a month is a unit of period used in a Calendar. It may not be out of context to mention that this system was invented by Mesopotamia. An average length of a month is 29.53 days; but in a calendar year there are 7 months with 31 days, 4 months having 30 days and one month has 28/29 days. It can be possible that under common parlance probably it meant a lunar month but in calculating the specified number of months that had elapsed after occurrence of a specified event then a General Rule is that the period of a month ends on the last day. Therefore, a month ends by the last date of that month.

The Tribunal after scrutinising a few sections of the Act found that on some occasions the Legislature had not used the term "Month" but used the number of days to prescribe a specific period. For example, in Section 254(2A) First Proviso it is prescribed that the Tribunal may pass an order granting stay but for a period not exceeding one hundred and eighty days. The Tribunal noted, "This is an important distinction made in this statute while subscribing the limitation/ period. This distinction thus resolves the present controversy by itself."

The Special Bench of the ITAT concluded that in the absence of any definition of the word 'month' in the Act, the definition of General Clauses Act 1897 shall be applicable. The Tribunal clarified that it was neither a liberal nor a literal interpretation of the Statute but it is a matter of "purposive construction of statute or "constructive interpretation of statute".

In Ashok Kumar Tiwari - 2014-TIOL-500-CESTAT-DEL, the CESTAT observed,

The very issue was specifically considered in Tamal Lahiri i.e. whether "month" occurring in the Bengal Municipal Act (15 of 1932) meant 30 days and not a calendar month.

The Supreme Court adverted to an argument that six months must be considered as 180 days and not as calendar months and observed that High Court did not accept that submission. The Supreme Court then proceeded to hold the High Court was right, since the relevant provisions of Section 533 (corresponding to Section 3(23) of the General Clause Act, 1987), defines a month as according to the British calendar. The Supreme Court ruled that the expression "six months" which occurs in Section 533 must be calendar months and not 180 days. The judgement in Tamal Lahiri is conclusive authority for the principle that a "month" as defined in Section 3(35) of the General Clause Act is a calendar month and not 30 days.

In THE AHMEDNAGAR MERCHANTS CO-OP BANK LTD - 2014-TIOL-1635-CESTAT-MUM, the CESTAT observed,

The General Clauses Act defines a month as a British Calendar month and it is not defined in terms of number of days.

Until next week (seven days)