GST Appeal Delay Can Be Condoned Beyond Four Months — Section
107(4) Not Mandatory - Calcutta High Court
Introduction: The Calcutta High Court, in a significant
judgment delivered on 4 November 2025, held that the GST Appellate
Authority has the power to condone delay beyond the time limit prescribed under
Section 107(4) of the CGST/WBGST Act, 2017, provided the appellant
offers valid and sufficient explanation for the delay. This ruling came in the
case of Ashok Ghosh vs. State of West Bengal & Others, where the
Division Bench comprising Justice Biswajit Basu and Justice Ajay
Kumar Gupta set aside the earlier order of the Appellate Authority, which
had refused to condone delay and dismissed the appeal as time-barred.
The case deals with a
recurring issue faced by taxpayers across the country: whether the delay in
filing a GST appeal—beyond the statutory period of three months + one month
condonable period—can be condoned. Several High Courts have taken different
views on this question. The Calcutta High Court, however, reaffirmed its
earlier position that Section 107(4) is directory, meaning that the
authority is not completely powerless to condone delays beyond the prescribed
limit. This judgment is important for taxpayers who genuinely miss appeal
timelines due to unavoidable circumstances.
Background
and Origin of the Dispute
The appellant, Ashok
Ghosh, is a businessman operating under the trade name M/s Ashok Ghosh.
He received a pre-show cause notice under Section 73(5) of the CGST Act,
followed by a detailed adjudication order under Section 74 issued by the
Assistant Commissioner, State Tax Bureau of Investigation (North Bengal), on 19
May 2022. The order was adverse to the appellant and created substantial
tax demands.
Aggrieved by this
decision, the appellant decided to challenge the adjudication before the GST
Appellate Authority under Section 107(1) of the Act. However, he filed
the appeal after the expiry of the normal period of three months and even after
the additional one-month grace period allowed for condonation under Section
107(4). Consequently, the Appellate Authority refused to entertain the appeal
and dismissed it as being filed beyond the “maximum permissible period.”
Finding no relief at the
appellate stage, the taxpayer approached the Calcutta High Court by filing a
writ petition. However, the learned Single Judge also dismissed the petition,
holding that the time limit in Section 107 is strict and cannot be relaxed
beyond four months. Relying on Supreme Court precedents such as Singh
Enterprises and Hongo India, the Single Judge held that when a
statute prescribes a maximum limitation period, the authority cannot extend it
even by one day.
This led the appellant to
file an intra-court appeal before the Division Bench, resulting in the present
judgment.
Arguments
Made by the Appellant
The appellant’s counsel, Mr.
Boudhayan Bhattacharyya, argued that the learned Single Judge wrongly
relied on the Supreme Court decisions of Singh Enterprises and Hongo
India. These judgments were rendered under the Central Excise Act, 1944,
which, he pointed out, is a completely different and older legislation with a
different legislative scheme. Therefore, the interpretation of limitation under
that Act cannot be automatically applied to GST laws.
The appellant relied
heavily on the Division Bench judgment of the same High Court in S.K.
Chakraborty & Sons vs. Union of India (MAT 81 of 2022), where it was
held that the timelines prescribed under Section 107(4) of the GST Act are directory
and not mandatory. According to this interpretation, the Appellate Authority
still retains the jurisdiction to condone delay beyond four months if the
taxpayer provides justified reasons.
Although the Supreme
Court had stayed the operation of the S.K. Chakraborty judgment, the appellant
argued that a stay order does not wipe away or invalidate the reasoning of a
High Court judgment. To reinforce this, reliance was placed on another Division
Bench decision in Pijush Kanti Chowdhury vs. State of West Bengal (2007),
which clearly held that a stay granted by the Supreme Court only affects the
parties to that case and does not eliminate the value of the High Court’s
reasoning as a precedent.
The appellant also relied
on the more recent judgment of the Calcutta High Court in Ram Kumar Sinhal
vs. State of West Bengal (2025), where the Court reaffirmed that even
though the S.K. Chakraborty decision is stayed, its ratio still binds
co-ordinate benches until set aside by the Supreme Court after a full hearing.
Arguments
Made by the State
The State, represented by
Ms. Rima Sarkar, acknowledged that the legal principles from the earlier
judgments were indeed clear. However, the State argued that since the S.K.
Chakraborty decision was under active challenge before the Supreme Court and
the operation of that judgment had been stayed, the Single Judge was justified
in refusing to rely on it.
Yet, the State did not
dispute the fact that the Division Bench in Ram Kumar Sinhal had already
taken a similar view, even after considering the stay order.
Findings of
the High Court
After hearing both sides,
the Division Bench delivered a detailed and reasoned judgment.
1. Supreme Court
decisions under the Excise Act not applicable
The Court held that the
judgments in Singh Enterprises and Hongo India—relied upon by the
Single Judge—were delivered in the context of the Central Excise Act, 1944,
and therefore, their interpretation cannot automatically apply to GST law. The
Excise Act is a different statute altogether, with a different structure,
historical context, and legislative scheme.
2. S.K. Chakraborty
judgment still holds persuasive value
The Division Bench
reiterated that the S.K. Chakraborty judgment remains a valid precedent because
a stay granted by the Supreme Court does not destroy the reasoning of a High
Court judgment. The stay only means the original parties cannot take benefit from
it while the case is pending; it does not strip the judgment of its persuasive
authority.
3. Ram Kumar Sinhal
judgment reaffirms directory nature of Section 107
The Court quoted
paragraphs 31 and 32 of the Ram Kumar Sinhal judgment, which clearly
state that:
- Section 107(4) of the GST Act is not
mandatory but directory.
- The Limitation Act can be applied to
condone delay in GST appeals.
- A stay order by the Supreme Court
does not nullify the precedent value of the judgment.
4. Stay by the Supreme
Court does not invalidate the judgment
The Court relied on its
own earlier ruling in Pijush Kanti Chowdhury that a stay granted by the
Supreme Court does not amount to a declaration of law under Article 141 of the
Constitution. It only temporarily suspends enforceability between the parties.
5. Appellate authority
has power to condone delay
The Court held that when
earlier judgments of the High Court have categorically declared Section 107(4)
as directory, the Appellate Authority cannot treat it as mandatory. Therefore,
the Authority wrongly refused to consider the appellant’s application
for condonation of delay.
Judgment
and Directions Issued
Based on the above
findings, the Division Bench set aside both:
- The Appellate Authority’s order dated
30 April 2024 refusing to condone delay; and
- The Single Judge’s order dated 19
August 2024 dismissing the writ petition.
The Court directed the
Appellate Authority to:
- Reconsider the appellant’s
application for condonation of delay;
- Allow both parties to place relevant
documents to justify their submissions;
- Decide the appeal on merits after
condoning delay if justified.
The appeal (MAT 82 of
2025) and connected applications were disposed of with no order as to
costs.
Conclusion
This judgment of the
Calcutta High Court provides major relief to taxpayers who unintentionally miss
deadlines while filing GST appeals. By holding that the time limit under Section
107(4) is directory and not mandatory, the Court has ensured that genuine
cases are not thrown out on technical grounds. The ruling emphasizes that
justice should not be defeated due to rigid interpretation of procedural
timelines, especially when the Act does not explicitly bar condonation. The
decision also clarifies important legal principles regarding the effect of
Supreme Court stay orders, the value of High Court precedents, and the broad
powers of appellate authorities under GST law.
At a time when many
taxpayers face challenges due to procedural complexities under GST, this
judgment stands as a reaffirmation that the courts will protect the rights of
honest taxpayers and prevent injustice caused by technicalities.
Disclaimer: Disclaimer: All the Information is based on the notification, circular advisory 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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