The Rajasthan High Court has condoned the delay in filing a statutory appeal under Section 107 of the CGST/RGST Act and directed the appellate authority to decide the appeal on merits, observing that a taxpayer cannot be left remediless solely because the appeal could not be filed within the prescribed limitation period.
The bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Maneesh Sharma has observed that if the appellate forum is rendered unavailable solely because of limitation, the taxpayer cannot be left without any remedy to challenge the assessment order on merits.
The petitioner challenged an order passed under Section 73 of the CGST Act, 2017, under which an additional GST demand had been raised. However, the petitioner was unable to file a statutory appeal within the limitation period prescribed under Section 107 because the GST portal refused to accept the appeal after expiry of the prescribed time.
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According to the petitioner, the delay occurred due to exceptional circumstances. The petitioner’s tax consultant, though aware of the adjudication order, fell seriously ill and was unable to communicate the order to the petitioner. Simultaneously, the petitioner, engaged in LPG distribution, remained occupied with the extraordinary pressure of supplying LPG arising from shortages caused by the ongoing Gulf War, resulting in the order remaining unnoticed until after the limitation period had expired.
The petitioner requested the High Court to permit filing of a fresh appeal, even physically if necessary, so that the dispute could be adjudicated on merits.
The GST department opposed the writ petition, contending that knowledge of the adjudication order by the petitioner’s consultant amounted to knowledge of the petitioner itself. Therefore, the reasons advanced for condonation of delay were not sufficient to override the statutory limitation prescribed under Section 107 of the GST Act.
The High Court noted that the impugned order had merely raised an additional tax demand under Section 73, a provision dealing with cases involving no allegation of fraud, wilful misstatement or suppression of facts.
The Court observed that whether the additional tax demand was legally sustainable required examination on merits and emphasized that procedural limitations should not deprive an assessee of an effective appellate remedy.
The Bench also relied upon the Supreme Court’s decision in Tecnimont Pvt. Ltd. v. State of Punjab (2021) 12 SCC 477, wherein relief had been granted in similar circumstances concerning delayed GST appeals.
Following the settled judicial approach adopted in earlier cases, the High Court condoned the delay in filing the appeal.
The court directed the petitioner to file a fresh statutory appeal within 15 days and directed the appellate authority to entertain and decide the appeal on merits without rejecting it on the ground of limitation.
The court clarified that the petitioner would be entitled to raise all legal and factual contentions before the appellate authority.
The court directed the appellate authority to pass a reasoned (speaking) order after considering the merits of the case.
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