Rythm Vs State of Rajasthan & Ors. (Rajasthan High Court)
Summary: The Rajasthan High Court, Bench at Jaipur, allowed the writ petition filed by M/s Rythm to the extent of condoning the delay in filing its GST appeal and directed the Appellate Authority to entertain and adjudicate the appeal on merits.
The petitioner challenged the Order-in-Original dated 09.12.2025 passed by the Joint Commissioner, State Tax, Circle-G, Zone-III, Jaipur, under which a GST demand of Rs.41,57,287/- was raised for financial year 2021-2022 on account of non-payment of tax for the relevant year and thereafter claiming excess of Input Tax Credit by the petitioner. The petitioner also sought release of the hold/lien placed on its bank account and restoration of amounts recovered from its Electronic Credit Ledger.
According to the petitioner, the statutory appeal could not be filed because the online status of the appeal showed that it was time-barred. The petitioner approached the High Court by filing the writ petition on 04.08.2026.
The petitioner submitted that the delay occurred due to bona fide circumstances and was neither intentional nor attributable to negligence or lack of diligence. It was specifically submitted that the petitioner remained unaware of the Order-in-Original dated 09.12.2025 because it had been uploaded on the GST portal under the head “Additional Notices and Orders” instead of “Notices and Orders”. The petitioner further stated that the e-mail address and mobile number of its tax consultant were registered on the GST portal at the relevant time, but the consultant did not inform the petitioner about the proceedings. It was also submitted that the order was never served manually or in hard copy.
Thereafter, according to the petitioner, the department initiated recovery proceedings by appropriating the balance available in the Electronic Credit Ledger and subsequently issued Form GST DRC-13 under Section 79(1)(c) of the CGST/RGST Act, 2017 to the petitioner’s banker on 16.07.2026. The banker was directed to remit the alleged outstanding amount of Rs.41,13,811/- to the Government and furnish details of other bank accounts linked with the petitioner’s PAN. The bank consequently marked a hold/lien on the petitioner’s bank account. The petitioner stated that it became aware of the recovery proceedings only when a banking transaction failed because of the hold/lien. Thereafter, on 28.07.2026, the respondent department further recovered the outstanding demand by utilising the balance available in the petitioner’s Electronic Cash Ledger.
The petitioner also contended that the Order-in-Original had been passed in violation of the mandatory provisions of Section 75(4) of the CGST/RGST Act, 2017 and the principles of natural justice, as no opportunity of personal hearing had been granted. It was submitted that after acquiring knowledge of the order, immediate steps were taken to challenge it, but by then the appeal had become time-barred on the GST portal.
The petitioner relied upon several Division Bench judgments of the Rajasthan High Court, namely M/s M R Traders v. UOI, M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors., Man Singh Tanwar v. Commissioner, Central Goods and Services Tax Department & Ors., and two decisions in RPC PSIPL JV Vs. State of Rajasthan & Ors. The petitioner argued that sufficient cause existed for the delay and that the appeal should be directed to be considered on merits after condoning the delay.
The respondents opposed the submission and contended that the impugned order had rightly been passed and that the appeal was barred by limitation.
The High Court noted that the Appellate Authority is bound by the statutory limitation prescribed under Section 107 of the RGST/CGST Act, 2017. However, considering the reasons for which the petitioner could not submit its appeal within the stipulated period and which the Court considered to be beyond its control, the Court held that non-adjudication of the appeal on merits would cause grave injury and prejudice to the petitioner.
The Court noted that in the Rajasthan High Court judgments cited by the petitioner, writ petitions had been allowed with directions to entertain the appeals on merits. The Court also considered the Division Bench judgment of the Punjab and Haryana High Court in Luxmi Traders versus Union Territory of Chandigarh and Ors., CWP No.27139/2025.
In Luxmi Traders, the Punjab and Haryana High Court had laid down conclusions concerning service of show-cause notices and orders through the GST Common Portal. The conclusions reproduced in the Rajasthan High Court judgment state that uploading an SCN on the Common Portal, without acknowledgement of receipt or a reply, could not by itself be treated as sufficient service. Where an SCN was served only by portal upload, no reply was filed and an ex parte order followed, the proceedings were to be restored to the stage of issuance of the SCN. Where an Order-in-Original was passed after contest but was served only by uploading it on the Common Portal, the limitation period for filing an appeal would not be triggered and the assessee would have the right to file an appeal within four weeks. The judgment also addressed appeals already dismissed as time-barred and cases involving ex parte adjudication following portal-only service.
The Rajasthan High Court expressly stated that, having given thoughtful consideration to the view expressed by the Punjab and Haryana High Court, it was in respectful agreement with that view and saw no reason why its benefit should not be accorded to the petitioner.
Following the consistent view already taken by the Rajasthan High Court, the Court allowed the writ petition to the extent of condoning the delay in filing the petitioner’s appeal. The Court did not adjudicate the underlying GST demand on merits.
The Court accordingly directed the Appellate Authority to entertain the petitioner’s appeal and adjudicate it on merits, provided the appeal was filed within 30 days of the instant order being uploaded on the website of the Court. All pending applications, if any, were disposed of.
Cases Discussed
- M/s M R Traders v. UOI, 2026 SCC OnLine RAJ 2115 — cited as a Division Bench judgment of the Rajasthan High Court supporting the direction to entertain a delayed appeal on merits where circumstances beyond the taxpayer’s control prevented timely filing.
- M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors., 2024 SCC OnLine Raj 3938 — cited as a Rajasthan High Court Division Bench decision in which relief concerning a delayed GST appeal was granted.
- Man Singh Tanwar v. Commissioner, Central Goods and Services Tax Department & Ors., D.B. CWP 14658/2024 — cited as a Rajasthan High Court Division Bench judgment supporting consideration of a delayed appeal on merits.
- RPC PSIPL JV Vs. State of Rajasthan & Ors., D.B. CWP 7260/2025 — cited as an earlier Rajasthan High Court Division Bench judgment in support of entertaining the appeal on merits.
- RPC PSIPL JV Vs. State of Rajasthan & Ors., D.B. CWP 11794/2025 — cited as another Rajasthan High Court Division Bench judgment supporting the relief sought concerning delayed filing of the appeal.
- Luxmi Traders versus Union Territory of Chandigarh and Ors., CWP No.27139/2025 — considered for its conclusions concerning portal-only service of SCNs and orders and the consequent effect on appellate limitation.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. The petitioner herein, inter alia, seeks quashing and setting aside of the impugned Order-in-Original dated 09.12.2025, passed by the Joint Commissioner, State Tax, Circle-G, Zone-III, Jaipur, and also seeks a direction commanding respondents to release the hold/lien placed on the petitioner’s bank account and to restore the amounts recovered from the Electronic Credit Ledger.
1.1 Impugned Order-in-Original dated 09.12.2025, vide which GST demand of Rs.41,57,287/- was raised for financial year 2021-2022 on account of non-payment of tax for the relevant year and thereafter claiming excess of Input Tax Credit by the petitioner. The appeal against the said order could not per force be filed before the Appellate Authority as the online status of the appeal would reveal that the same is time-barred. The petitioner is thus left remediless. Aggrieved by the same, petitioner filed the instant writ petition on 04.08.2026.
2. Learned counsel for the petitioner submits that the delay in filing the appeal occurred due to bona fide circumstances. The delay is thus occasioned by genuine and sufficient cause, and not due to any negligence or lack of diligence on the part of the petitioner.
2.1 It was further submitted that the petitioner remained unaware of the passing of the impugned order dated 09.12.2025 as the same was uploaded on the GST portal under the head “Additional Notices and Orders” instead of “Notices and Orders”. Further, at the relevant time, the e-mail address and mobile number of the petitioner’s tax consultant were registered on the GST portal, who did not inform the petitioner about the impugned proceedings. The impugned order was never served upon the petitioner manually or in hard copy. Thereafter, the respondent department initiated recovery proceedings by first appropriating the balance available in the petitioner’s Electronic Credit Ledger and, thereafter on 16.07.2026, issued Form GST DRC-13 under Section 79(1)(c) of the CGST/RGST Act, 2017 to the petitioner’s banker, directing the Bank to remit alleged outstanding amount of Rs.41,13,811/- to the government and to furnish details of all other bank accounts linked with the petitioner’s PAN. Consequently, the Bank marked a hold/lien on the petitioner’s bank account. The petitioner came to know about the recovery proceedings only when a banking transaction failed on account of the hold/lien marked on the bank account. Thereafter, on 28.07.2026, the respondent department further recovered outstanding demand amount by utilizing the balance available in the petitioner’s Electronic Cash Ledger.
2.2 Owing to these circumstances, the petitioner could not take necessary steps within the prescribed period. The delay was neither intentional nor due to any negligence. The impugned order has been passed in complete violation of the mandatory provisions of Section 75(4) of the CGST/RGST Act, 2017 and the principles of natural justice, as no opportunity of personal hearing was ever granted to the petitioner. The petitioner acquired knowledge of the impugned order, whereafter immediate steps were taken to challenge the same. However, by then, the appeal had become time-barred on the GST Portal.
3. In the aforesaid backdrop, we have heard the learned counsels for the parties and perused the record.
4. Learned Counsel for the petitioner, relying on the various Division Bench judgments of this very Court in M/s M R Traders v. UOI1, M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors2, Man Singh Tanwar v. Commissioner, Central goods and Services Tax Department & Ors.3, RPC PSIPL JV Vs. State of Rajasthan & Ors4 and RPC PSIPL JV Vs. State of Rajasthan & Ors5 argues that sufficient cause of delay in filing the appeal due to circumstances beyond control has been shown and thus appeal be directed to be considered on merits after condoning the delay by this Court.
5. Learned counsels for the respondents oppose the above submission and contends that the impugned order has rightly been passed and appeal is now barred by limitation.
6. Having heard, as above, it transpires that while it is true that the Appellate Authority is bound by the statutory provisions of limitation provided under Section 107 of the RGST/CGST Act, 2017, however, considering the reasons owing to which the petitioner could not submit its appeal within the stipulated time, being beyond its control, non-adjudication of appeal on merits would cause grave injury and prejudice to the petitioner.
7. In the judgments cited above, this Court, while allowing the writ petitions, have issued directions to entertain the appeal on merits.
8. Aside above, our attention has been gone to a Division Bench Judgment rendered by Punjab and Haryana High Court in case titled as Luxmi Traders versus Union Territory of Chandigarh and Ors.6, wherein based on elaborate discussion and deliberations thereof, following view has been taken.
“60. On the basis of discussions and deliberations aforesaid, we come to the following conclusions:-
(i) Service of SCN upon the petitioner/assessee concerned cannot be deemed sufficient merely on account of its uploading on the Common Portal, unless its receipt is acknowledged or a reply is filed.
(ii) Where SCN is served only by way of uploading it on the Common Portal and in the absence of reply filed by the petitioner/assessee concerned, ex parte order is passed in orginal, the proceedings would stand restored to the stage of issuance of SCN and the petitioner would be at liberty to file reply to the SCN within a period of four weeks from today whereafter, the Department shall proceed further after affording required opportunity of hearing.
(iii) In cases where the order-in-original is passed after contest, and is served only by uploading it on the Common Portal, the period of limitation for filing of appeal would not be triggered, and the assessee aggrieved will have the right to file an appeal within a period of four weeks from today.
(iv) Where appeals filed against the order-in-original, which was served only by uploading it on the Common Portal are dismissed on the ground of limitation, the order of the Appellate Court shall be set aside and the appeal would stand restored to its original number, and would be heard and decided on merits.
(v) In cases where SCNs were served only on portal and ex parte adjudication order was passed for want of reply of assessee and appeal against the said order was dismissed on the ground of delay, both adjudication order and order-in-appeal shall be set aside and proceedings will be restored at the stage of issuance of SCN and petitioner/assessee shall be at liberty to file reply to SCN within four weeks from today, whereafter, the department shall proceed further after affording due opportunity of hearing.”
9. Having given out thoughtful consideration to the aforesaid view expressed by the Punjab and Haryana High Court, we are in respectful agreement therewith and accordingly, see no reason why the benefit be not accorded to the petitioner therein.
10. In the premise, following the consistent view as already taken by this Court, ibid, we allow the present writ petition to the extent of condoning the delay in filing of the appeal by the petitioner.
11. Accordingly, the Appellate Authority shall now entertain the appeal of the petitioner and adjudicate the same on merits, provided the same is filed within 30 days of the instant order being uploaded on the website of this court.
12. All pending applications, if any, stand disposed of.
Notes:
1 2026 SCC OnLine RAJ 2115
2 2024 SCC OnLine Raj 3938
3 D.B. CWP 14658/2024
4 D.B. CWP 7260/2025
5 D.B. CWP 11794/2025
6 (2026:PHHC099329:DB) in CWP No. 27139/2025
