Condonation of Delay in Filing GST Appeal Under Goods and Services
Tax (Beyond Statutory Period) / Time Limit to File Appeal in GST
Summary of
Case Law:
In the case of M/s
Addichem Speciallity LLP v. Special Commissioner I, Department of Trade and
Taxes & Anr., the Delhi High Court dismissed a batch of writ petitions
challenging the rejection of GST appeals on grounds of delay. The petitioners
had filed appeals under Section 107 of the CGST Act, 2017, but these appeals
were filed beyond the maximum permissible time limit (3 months + 1 month grace
period). The Appellate Authority had dismissed the appeals in limine for being
time-barred. The petitioners approached the Delhi High Court under Article 226
of the Constitution, seeking condonation of the delay on various grounds
including the COVID-19 pandemic, technical errors, and lack of proper
communication. The Court held that neither the Appellate Authority nor the High
Court has the power to extend the limitation period beyond what is statutorily
prescribed. The petitions were thus dismissed.
Petitioner:
M/s Addichem Speciallity LLP
Respondents:
Special Commissioner I, Department of Trade and Taxes & Another
Writ Petition Number:
W.P.(C) 15045/2024 (and other connected matters)
Date of Order:
07 February 2025
Court: High
Court of Delhi at New Delhi
Full
Article:
In a significant ruling
with implications for thousands of GST-registered businesses across India, the
Delhi High Court on 07 February 2025 delivered its judgment in M/s Addichem
Speciallity LLP v. Special Commissioner I, Department of Trade and Taxes &
Anr., W.P.(C) 15045/2024 and connected matters. The Court addressed the
issue of whether appeals filed under Section 107 of the Central Goods and
Services Tax Act, 2017 (CGST Act), can be entertained beyond the statutory time
limit prescribed by the Act.
The judgment arose from a
batch of petitions filed by various businesses whose GST registrations were
cancelled by the department for different reasons, including non-filing of
returns, non-existent business premises, or other alleged defaults. These businesses
had filed appeals before the Appellate Authority under Section 107 of the CGST
Act. However, in each case, the appeals were filed well beyond the maximum time
period allowed under law—three months plus an additional one month for which
delay can be condoned by the authority. As a result, the Appellate Authority
rejected these appeals for being time-barred.
Aggrieved by this, the
petitioners invoked the writ jurisdiction of the Delhi High Court under Article
226 of the Constitution. They contended that the delays occurred due to
unavoidable circumstances such as the COVID-19 pandemic, illness of tax professionals,
technical issues on the GST portal, and confusion regarding notices. They
requested the Court to condone the delay in filing the appeals and direct the
Appellate Authority to hear their cases on merits.
Taking the lead case of M/s
Addichem Speciallity LLP, the firm had voluntarily registered under the
CGST Act in April 2019. It failed to file GST returns from February to June
2022 due to disruptions caused by COVID-19, including the death of a family
member of their Chartered Accountant. On 26 July 2022, a show cause notice was
issued by the department, and ultimately, the GST registration was cancelled
with retrospective effect from the date of registration. The petitioner filed
an appeal on 25 January 2024, but the Appellate Authority dismissed it in limine
on the ground of limitation, since it was filed beyond the maximum period
allowed under Section 107(1) and 107(4) of the CGST Act.
The High Court examined
the language of Section 107 of the CGST Act in detail. Sub-section (1) provides
that an appeal must be filed within three months from the date of the order.
Sub-section (4) grants an additional one-month period if the appellant shows
sufficient cause for the delay. Beyond this one-month grace period, the statute
does not empower the Appellate Authority to condone the delay.
The Court held that these
provisions are explicit and leave no scope for liberal interpretation. The CGST
Act is a special legislation and constitutes a self-contained code with its own
rules regarding limitation. Therefore, general provisions such as Section 5 of
the Limitation Act, 1963—which allows condonation of delay in normal civil
cases—do not apply to proceedings under the CGST Act unless expressly stated.
The Court placed reliance
on several Supreme Court rulings to support its view. In Singh Enterprises
v. Commissioner of Central Excise, the Supreme Court held that where a
statute prescribes a limitation period and grants a restricted power to condone
delay, the authority cannot extend the time beyond the prescribed limit.
Similarly, in Assistant Commissioner (CT), Kakinada v. GlaxoSmithKline
Consumer Health Care Ltd., the Supreme Court clarified that even Article
142 (which allows the Supreme Court to do complete justice) cannot be used to
override a clear statutory bar on limitation.
The Delhi High Court also
rejected the argument that it could invoke its powers under Article 226 to
condone such delay in extraordinary circumstances. The Court stated that while
it has wide powers under Article 226, it cannot override the legislative intent
and statutory provisions. To do so would amount to rewriting the law, which is
impermissible.
The judgment also
discussed and disagreed with contrary views taken by some High Courts. For
instance, the Calcutta High Court in Mukul Islam v. Assistant Commissioner
of Revenue had allowed delayed appeals on equitable grounds. Likewise, the
Andhra Pradesh High Court in Venkateshwara Rao Kesanakurti v. State of AP
permitted condonation of delay beyond the statutory period. The Delhi High
Court respectfully disagreed with these rulings, stating that they do not align
with the binding judgments of the Supreme Court and the strict language of
Section 107(4).
During the hearing, the
Court considered several individual cases where unique facts were presented. In
one matter, a petitioner claimed that its registration was cancelled because
the department could not locate the firm’s address in a rural locality where
addresses were informally assigned. In another case, the petitioner argued that
the GST portal had not updated the reply submitted to the show cause notice,
causing unjust cancellation. In yet another case, the firm argued that the show
cause notice was vague and lacked material details, thereby violating the
principles of natural justice.
While the Court
acknowledged the hardships and procedural issues faced by small businesses, it
reiterated that such difficulties do not empower the judiciary to bypass a
clear statutory limitation. The Court emphasized that timely filing of appeals
is crucial for legal certainty and smooth administration of tax law. If delays
are condoned at will, it would undermine the discipline and structure of the
GST system.
The judgment serves as a
reminder to taxpayers, GST consultants, and legal practitioners that compliance
with timelines is not merely procedural—it is mandatory. Businesses must be
vigilant in checking notices issued on the GST portal, consult professionals
promptly, and file appeals within the prescribed periods. Delay, even if
unintentional, may result in loss of legal remedies.
The decision also
highlights the need for greater awareness among taxpayers about their rights
and obligations under the CGST Act. Many small businesses rely entirely on tax
consultants and are unaware of appeal deadlines or orders uploaded on the
portal. As the law currently stands, ignorance or reliance on third parties is
not a sufficient ground to excuse non-compliance with limitation provisions.
In conclusion, the Delhi
High Court has firmly reiterated that the time limit for filing appeals under
Section 107 of the CGST Act is absolute. The maximum permissible delay that can
be condoned is one month beyond the initial three-month period. Beyond that,
neither the Appellate Authority nor the High Court can extend the time limit,
even under extraordinary circumstances. This decision will act as a binding
precedent within Delhi and is likely to influence similar cases across India.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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