Laxmi Motors Vs State of M.P. And Others (Madhya Pradesh High Court)
MP High Court Rules on GST Appeal Limitation: Appeal Filed in 4th Month is Valid After Applying General Clauses Act & Supreme Court Precedent
Summary
The Madhya Pradesh High Court, in the case of Laxmi Motors Vs State of M.P. And Others, addressed a significant point of law concerning the proper method for calculating the statutory period of limitation for filing an appeal under the Central Goods and Services Tax Act, 2017 (CGST Act). The core issue revolved around the Appellate Authority’s decision to dismiss the petitioner’s appeal as time-barred, based on an allegedly flawed computation of the four-month limitation period.
Factual Background and Authority’s Decision
The petitioner, Laxmi Motors, challenged an order passed by the Appellate Authority and Joint Commissioner, State Taxes, Satna Division, dated August 13, 2025. This order had dismissed the petitioner’s underlying appeal—filed on November 25, 2024—against an original penalty order issued on July 26, 2024. The Appellate Authority had concluded that the appeal was barred by limitation. The State’s counsel later confirmed that the Authority had computed the limitation period as 120 days, finding the appeal to be barred by two days.
Petitioner’s Argument and Statutory Interpretation
Counsel for Laxmi Motors argued that the Appellate Authority failed to correctly apply the relevant statutory provisions and binding judicial precedents.
The argument rested on two primary legislative provisions:
1. Section 9 of the General Clauses Act, 1897: This provision mandates that when a period of time is computed from a specific date, the day of the action (i.e., the day the original order was passed) must be excluded. Consequently, the limitation period, starting from the original order date of July 26, 2024, should commence from the next day, July 27, 2024.
2. Section 107 of the CGST Act, 2017:
- Sub-section (1) provides a limitation period of three months for filing an appeal. The petitioner stressed the use of the word “months” over “days,” which is critical for calculation.
- Sub-section (4) grants the Appellate Authority the discretion to condone a further delay of one month beyond the initial three-month period if sufficient cause is shown.
Based on this, the petitioner calculated the limitation:
- Three-month statutory period, starting July 27, 2024, would expire on October 27, 2024.
- The one-month grace period, beginning October 28, 2024, would then expire on November 26, 2024.
Since the appeal was filed on November 25, 2024, it was, according to this calculation, filed within the extended limitation period.
High Court’s Reasoning and Judicial Precedents
The High Court agreed with the petitioner’s interpretation, method of calculation, and reliance on binding precedents.
1. Exclusion of First Day: The Court first affirmed that, in line with Section 9 of the General Clauses Act, 1897, the day the original order was passed (July 26, 2024) must be excluded, making July 27, 2024, the commencement date for the limitation period.
2. Definition and Calculation of ‘Month’: To define a ‘month’ and calculate the period, the Court relied upon established judicial authority:
- The Supreme Court’s decision in State of Himachal Pradesh and another Vs. Himachal Techno Engineers and another (2010) 12 SCC 210 was cited, which, in turn, referred to Section 3(35) of the General Clauses Act defining a “month” as a period reckoned according to the British Calendar.
- Crucially, the Court referred to the corresponding date rule, citing the House of Lords judgment in Dodds Vs. Walker (1981) and the Supreme Court of India’s ruling in Bibi Salma Khatoon v. State of Bihar [(2001) 7 SCC 197]. This rule stipulates that when calculating a period of months, the period ends on the corresponding date in the appropriate subsequent month.
Applying these principles, the High Court held that the initial three-month period starting on July 27, 2024, ended precisely on October 27, 2024. The subsequent one-month grace period provided under Section 107(4) of the CGST Act would then extend the final date for filing the appeal to November 26, 2024.
Conclusion and Direction
The High Court determined that the Appellate Authority’s order suffered from a clear failure to correctly apply statutory law (Section 107(1) and (4) of the CGST Act and Section 9 of the General Clauses Act) and binding precedents (specifically Himachal Techno Engineers and Bibi Salma Khatoon).
The Court, therefore, concluded that the appeal filed on November 25, 2024, was not barred by limitation. The impugned order of the Appellate Authority was set aside, the writ petition was allowed, and the Appellate Authority was directed to decide the appeal on its own merits.
The High Court further imposed costs of ₹25,000/- on the State, with an explicit direction that this amount be recovered from the delinquent official responsible for the error, ensuring the cost is not borne by the public exchequer.
FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT
This petition is filed challenging the order dated 13.8.2025 (Annexure P-1) passed by the Appellate Authority and the Joint Commissioner, State Taxes, Satna Division in Appeal Case No.115/Appeal /Penalty/2024, whereby the appeal filed by the appellant – Laxmi Motors against the order dated 26.7.2024 on 25.11.2024 has been termed to be barred by limitation, thus dismissed.
2. Shri Usrethe, learned counsel for the petitioner submits that in terms of the judgment of Hon’ble Supreme Court in State of Himachal Pradesh and another Vs. Himachal Techno Engineers and another (2010) 12 SCC 210 firstly in terms of the provisions contained in Section 9 of the General Clauses Act 1897, day of passing the order i.e. 26.7.2024 shall be excluded and limitation is to be counted from 27.7.2024.
3. It is further submitted that since sub Section (1) of Section 107 Central Goods and Services Tax Act 2017 provides for a limitation of three months and not 90 days, in terms of the provisions contained in law, limitation is computed for three months and not 90 days, which will expire on 27.10.2024.
4. Thereafter under sub Section (4) of Section 107, appellate authority has been given one month’s further grace period to entertain the appeal over and above three months or six months as the case may be and when this aspect is taken into consideration, then one month period from 27.10.2024 would have expired on 26.11.2024 but appeal was filed prior to that on 25.11.2024. Therefore, admittedly appeal was filed within the period of limitation but this aspect has been overlooked by the learned appellate authority.
5. Shri Paroha, learned Government Advocate for the State who was granted time on 19.9.2025 to seek instructions, in the first place, submits that copies of the judgments which have been uploaded in reference were not given to him and secondly he submits that he has taken instructions and submits that infact the authority computed limitation of 120 days and, therefore, appeal was admittedly barred by two days.
6. After hearing learned counsel for the parties and going through the record, it is evident and not disputed that the impugned order against which appeal was filed is passed by one Minakchhi Pandey, Assistant Commissioner of State Tax Rewa : Satna Division : Jabalpur Zone : Madhya Pradesh in Reference No.ZD230724024483L on 26.7.2024. As per the provisions contained in Section 9 of the General Clauses Act 1897, it is provided that in any Central Act, when the word “from” is used to refer to commencement of time, the first of the days in the period of time shall be excluded. Therefore the period of “three months from the date of which the party making that application had received the arbitral award”, shall be computed from the date next to the date on which order was passed. Thus, in terms of the provisions contained in Section 9 of the General Clauses Act in the present case three months limitation as provided under sub Section (1) of Section 107 of the GST Act will commence from 27.7.2024.
7. Hon’ble Supreme Court in the case of Himchal Techno Engineers (supra) has referred to Section 3 (35) of the General Clauses Act, 1897 to define a “month” as meaning a month reckoned according to the British Calendar. It is noted that “17. in Dodds Vs. Walker (1981) 1 WLR 1027 : (1981) 2 ALL Er 609 (HL) the House of Lords held that in calculating the period of a month or a specified number of months that had elapsed after the occurrence of a specified event, such as the giving of a notice, the general rule is that the period ends on the corresponding date in the appropriate subsequent month irrespective of whether some months are longer than others. “To the same effect is the decision of this Court in Bibi Salma Khatoon v. State of Bihar [(2001) 7 SCC 197.”
8. Thus, it is evident that period of limitation would have commenced on 27.7.2024 and in terms of the judgment of the Supreme Court in Bibi Salma Khatoon v. State of Bihar [(2001) 7 SCC 197 so also the House of Lords in Dodds Vs. Walker, three months’ period would be over on 27.10.2024. Thereafter in terms of sub Section (4) of Section 107 of the Central Goods and Services Act 2017, a further period of one month has been provided which would have come to an end on 26th November 2024. Therefore, appeal filed on 25th November 2024 cannot be said to be barred by limitation.
9. Accordingly, the impugned order dated 13.8.2025 (Annexure P-1) having failed to take into consideration the provisions contained in Section 107 (1) and sub Section (4) of Section 107 so also the law laid down by Hon’ble Supreme Court in Himchal Techno Engineers (supra) is not sustainable in the eyes of law and is accordingly set aside. This writ petition is allowed and disposed off.
10. Let appeal be decided on its own merits.
11. State to bear cost of this litigation. It is quantified as Rs.25,000/-. Let this cost be recovered from the delinquent if the department so desires. This cost shall not be recovered from the public exchequer at any cost.
