The Telangana High Court has held that an appellate authority should not reject an appeal as barred by limitation when the taxpayer had been actively pursuing a statutory rectification application against the original assessment order.
The Bench of Justice P. Sam Koshy and Justice Narsing Rao Nandikonda observed that the petitioner had been genuinely pursuing statutory remedies against the original order and had, at every stage, acted within the prescribed timelines – first by filing the rectification application in time, and then by filing the appeal promptly upon its rejection. The Appellate JC ought to have taken a pragmatic approach and at best, could have directed the petitioner to amend the memo of appeal to cure the technicality rather than outright dismissing it on this hyper- technical ground.
The dispute arose from an assessment order passed on August 29, 2024, for the financial year 2019-20. Instead of immediately filing an appeal, the taxpayer opted to invoke the statutory rectification mechanism and filed a rectification application on November 22, 2024, within the prescribed time limit.
The rectification application remained pending for nearly a year before being rejected on November 24, 2025. Following the rejection, the taxpayer filed an appeal before the Appellate Commissioner on February 19, 2026, which was within three months from the date of rejection of the rectification application.
However, while considering the appeal, the appellate authority counted the limitation period from the date of the original assessment order and not from the date of disposal of the rectification application. On that basis, the appeal was dismissed as time-barred.
The taxpayer argued before the High Court that there was no inaction or negligence on its part. It submitted that it had been diligently pursuing the statutory remedy of rectification against the assessment order and that the appeal was filed promptly after the rectification application was rejected.
According to the taxpayer, the delay, if any, occurred because the rectification proceedings remained pending before the department for an extended period and not due to any fault attributable to the taxpayer.
The State Tax Department contended that after the rejection of the rectification application, the taxpayer should have specifically challenged the rectification order in the appeal. Since the appeal challenged only the original assessment order, the department argued that the appellate authority was justified in dismissing it on limitation grounds.
The High Court found merit in the taxpayer’s submissions and noted that the rectification application had been filed within the prescribed period and that the taxpayer had continuously pursued statutory remedies against the assessment order.
The Bench observed that once the rectification application was rejected on November 24, 2025, the taxpayer filed the appeal within three months, demonstrating diligence rather than delay.
The Court emphasized that the appellate authority should not have rejected the appeal on a hyper-technical interpretation of limitation, particularly when the taxpayer had been actively pursuing remedies available under the statute.
The Bench further remarked that if the appellate authority felt that the rectification rejection order also needed to be challenged, it could have directed the taxpayer to suitably amend the memorandum of appeal instead of dismissing the appeal outright.
Holding that a more pragmatic approach was required, the High Court set aside the appellate order dated April 20, 2026, insofar as it dismissed the appeal as time-barred.
The matter has been remanded to the Appellate Joint Commissioner for fresh adjudication on merits in accordance with law.
The Court clarified that it had not expressed any opinion on the merits of the underlying tax dispute and that the appellate authority would be free to decide the case independently.
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