The Allahabad High Court has set aside an appellate order rejecting a GST appeal filed with a delay of 510 days, after finding that the appellate authority had failed to consider the taxpayer’s explanation for the delay.

The bench of Justice Vikas Budhwar remitted the matter to the appellate authority for fresh consideration of the appeal, including the delayed condonation application. The authority has been directed to pass an order in accordance with law within two months.

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The bench did not condone the delay itself or decide the validity of the underlying tax demand. It expressly left all questions open for determination by the appellate authority.

The dispute arose from proceedings initiated against a registered firm under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, for the financial year 2018–19.

The Assistant Commissioner, State Tax, Sector-5, Prayagraj, issued a show cause notice in Form GST DRC-01 on December 20, 2023. According to the taxpayer, negligence on the part of its chartered accountant and advocate prevented its participation in the proceedings.

A reminder was subsequently issued on February 8, 2024, fixing the hearing for February 23, 2024. The taxpayer also contended that the notice had been placed in the “View Additional Notices and Orders” section of the GST portal and that a reply could not be filed.

An ex parte assessment order was passed on April 16, 2024, raising a demand of ₹63,096 in tax, ₹56,692 in interest and ₹20,000 in penalty, aggregating to ₹1,39,788.

The taxpayer filed an appeal on January 2, 2026, along with an application seeking condonation of delay. The appellate authority rejected the appeal on February 4, 2026, holding that it had been filed beyond the statutory time limit.

In its order, the appellate authority referred to Section 107(1), which prescribes three months for filing an appeal from the date of communication of the decision or order. It also referred to Section 107(4), which permits a further period of one month where the authority is satisfied that sufficient cause prevented timely filing.

The authority recorded that the assessment order had been communicated through the GST portal and that the taxpayer had itself mentioned April 16, 2024, as the date of communication in Form GST APL-01.

It consequently held that the appeal, filed approximately 17 months beyond the prescribed period, was not admissible under the statutory provisions.

In the delay condonation application, the taxpayer put forward several explanations for not approaching the appellate authority within time.

It stated that the firm’s principal partner had been ill on the date identified in its application as the hearing date. It further stated that the business had permanently closed on February 12, 2025, and claimed that it became aware of the ex parte assessment order during recovery proceedings conducted through an amin.

The taxpayer maintained that the delay was unintentional and sought its condonation in view of the circumstances.

Before the High Court, counsel confined the relief sought at that stage to the appellate order dismissing the appeal on limitation. The principal contention was that the specific grounds explaining the delay had been brushed aside without consideration.

The High Court noted that the appeal had been delayed by 510 days, or approximately 17 months.

However, after examining the appellate order, the Court found that although it ran into two pages, it contained no consideration of the grounds advanced for condonation of delay.

The Court’s concern was the absence of an examination of the taxpayer’s explanation. Whether those grounds were tenable or untenable required consideration by the authority.

The department acknowledged that the appellate order was not happily worded and submitted that the taxpayer’s contentions ought to have been considered. The Court also recorded the State counsel’s statement that the matter could be remitted for reconsideration.

Setting aside the appellate order, the High Court directed the appellate authority to reconsider the appeal together with the delay condonation application and pass an order in accordance with law within two months.

The Court expressly declined to enter into the merits of the dispute, leaving all questions open before the appellate authority.

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