The Rajasthan High Court has held that where a taxpayer is prevented from filing a statutory GST appeal due to circumstances beyond its control, particularly because the adjudication order was not effectively communicated, the delay deserves to be condoned to ensure that the dispute is decided on merits.
The bench of Justice Arun Monga and Justice Ashutosh Kumar directed the GST Appellate Authority to entertain the appeal despite the expiry of the statutory limitation period, emphasizing that denial of an opportunity to challenge the demand would cause grave prejudice to the taxpayer.
The dispute arose after the GST authorities raised a demand of ₹1.31 crore against the petitioner for the financial year 2017-18, alleging wrongful availment and utilization of Input Tax Credit (ITC). The demand was confirmed through an order dated 11 December 2023. However, the petitioner was unable to file a statutory appeal under Section 107 of the CGST/RGST Act because the GST portal reflected the appeal as barred by limitation, compelling it to approach the Rajasthan High Court through a writ petition.
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The petitioner argued that the adjudication order had never been duly communicated. According to the petitioner, the order was passed ex parte without providing an opportunity to file a reply or avail a personal hearing as required under Section 75(4) of the CGST Act.
The petitioner further contended that instead of being uploaded under the relevant case ID on the GST portal, the order was merely placed under the “Additional Notices and Orders” tab, making it impossible for the petitioner to discover it in the ordinary course.
The company submitted that its GST registration had already been cancelled and therefore it was not regularly accessing the GST portal. Upon noticing the show cause notice in October 2024, it genuinely believed that adjudication had not yet taken place because the portal continued to display the proceedings as “Pending for Order.”
Acting on that understanding, the petitioner filed a reply to the show cause notice seeking closure of the proceedings. Even thereafter, the portal continued to indicate that no final order had been passed, reinforcing the petitioner’s belief that the matter remained pending.
The petitioner submitted that it first became aware of the adjudication order only after receiving a communication from its banker regarding a recovery notice issued in Form GST DRC-13. It also pointed out that a departmental recovery email had landed in its spam folder and came to its notice much later.
According to the petitioner, the delay in filing the statutory appeal was entirely attributable to the absence of proper communication of the adjudication order and not to any negligence or deliberate inaction on its part.
The State opposed the writ petition, contending that the adjudication order had been validly passed and that the statutory period prescribed under Section 107 had expired. It argued that the appeal had become barred by limitation and therefore could not be entertained.
The High Court acknowledged that the Appellate Authority is ordinarily bound by the limitation provisions contained in Section 107 of the GST law. Nevertheless, it observed that the present case involved exceptional circumstances where the petitioner had demonstrated sufficient cause for not filing the appeal within the prescribed time.
The Bench noted that the delay occurred due to reasons beyond the petitioner’s control and held that refusing to consider the appeal on merits would result in grave injury and prejudice. The Court also relied upon its earlier Division Bench decisions that had granted similar relief in comparable situations involving delayed GST appeals.
Allowing the writ petition, the Rajasthan High Court condoned the delay in filing the statutory appeal and directed the GST Appellate Authority to entertain and decide the appeal on merits.
The Court further ordered that the petitioner must file the appeal within 30 days from the date of uploading of the High Court’s order, following which the Appellate Authority shall adjudicate the matter in accordance with law. All pending applications were also disposed of.
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