The issue of condonation of delay in filing appeals beyond statutory timelines under the Goods and Services Tax (GST) regime is a critical intersection of procedural adherence and the pursuit of substantive justice. Section 107(4) of the Central Goods and Services Tax Act, 2017 (CGST Act) outlines the framework for extending the appeal period by one month if the appellant can demonstrate sufficient cause for the delay. However, the question arises whether an appeal can be condoned even beyond this one-month extension. This article explores the jurisprudence on this matter, balancing procedural rigor with the principles of natural justice.
As per Section 107(4) of the CGST Act, 2017:
“(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.”
Therefore, under Section 107(4) of the CGST Act, 2017, the delay in filing an appeal can be condoned beyond the statutory time limit of three months if the appellate authority is convinced that sufficient cause prevented the appellant from filing the appeal, allowing for an extra period of one month.
However, this raises the question of whether the appeal can be condoned even beyond this one-month extension provided in the statute?
Reference here is made to Section 5 of The Limitation Act, 1963 wherein it is stated that,
“1) Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.”
Condonation of delay must be satisfactorily explained and cannot be claimed as a matter of right. Various judgments support this principle, with some ruling in favor of the appellant and others against it. The crux of the matter being that a sufficient explanation of the delay is essential. A liberal approach has been adopted by the courts on the principle that “When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. Every day’s delay must be explained” does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational, common sense, pragmatic manner.” The courts concerned have taken a liberal approach in many cases by being sensitive to the justice-oriented approach rather than the iron-cast technical approach
In multiple judgments in the GST Era, the Hon’ High Courts have held that where there was sufficient cause for not preferring appeal in time, the interest of justice requires condonation of the delay and adjudication of the matter on merits by the Appellate Authority as the appeal is a valuable statutory right and hence, have condoned the delay in accordance with Section 5 of the Limitation Act,1963 and various other reasons like exceptional circumstances, substantial justice and various other precedents and judicial interpretation.
On one hand where there are multiple judgments favoring condonation there are also judgments like M/s. Yadav Scrap Traders vs. Additional Commissioner (Allahabad High Court), WRIT TAX No. – 977 of 2023, Dated; 15.02.2024 which upheld the dismissal of an appeal under Section 107 of the GST Act due to a delay of 73 days, citing the Act’s self-contained nature which excludes the application of Section 5 of the Limitation Act. The Court dismissed the writ petition, emphasizing the importance of strict adherence to limitation periods in tax statutes for efficient tax administration.
The following judgments which were in the favor of the appellant illustrates the High Courts approach to condoning delays in filing appeals under GST laws when sufficient cause is demonstrated, emphasizing the importance of adhering to principles of natural justice and statutory rights of appeal.
Liberty was granted to the appellant to file a statutory appeal, more so when certain sums of money were already recovered by the department from the electronic cash ledger.
The petitioner had no knowledge about the service of adjudication order on the accountant viz., Mr. Dhanesh the medical certificate of whom was placed on record. The writ petition was allowed, and the delay was condoned as no material was placed refuting the contents of the medical certificate due to which the Hon’ High Court was convinced with the inability pleaded by the petitioner.
The Hon’ Delhi High Court in the instant case set aside the impugned order and restored the petitioner’s appeal, recognizing that the petitioner filed the appeal online within the prescribed period but erroneously sent the hardcopy to the wrong department. The court deemed this error bonafide and condonable, thus allowing the appeal to be adjudicated on its merits.
The Hon’ Karnataka High Court set aside the impugned endorsement dismissing the petitioner’s appeal for being time-barred, recognizing the applicability of Section 14 of the Limitation Act, which excludes the time spent before a wrong forum. The court also noted the extension of the appeal period by the CBIC up to January 31, 2024. The Appellate Authority was directed to consider the appeal on its merits without reference to the limitation issue.
A 56-day delay in filing an appeal was condoned due to the petitioner’s ill-health as he was bedridden, despite the delay being beyond the condonable period. The court allowed the writ petition, noting the absence of a GST Appellate Tribunal, and directed the appellate authority to restore and hear the appeal on merits. The petitioner was ordered to pay Rs.20,000 in costs.
6) S.K. Chakraborty & Sons Vs Union of India & Ors. ( Calcutta High Court), Appeal Number : M.A.T. 81 of 2022, Date of Judgement/Order : 01/12/2023
The Hon’ Calcutta High Court ruled that Section 5 of the Limitation Act, 1963 applies to Section 107 of the West Bengal GST Act, 2017, allowing the condonation of delays beyond the prescribed period for filing appeals. The court set aside the orders of the single judge and the appellate authority, directing the appellate authority to consider the delay condonation application on its merits. If, the explanations advanced for condonation of delay are accepted to be sufficient, the Appellate Authority may condone the delay in preferring the appeal and hear and dispose of the appeals on merits. The appeals were disposed of without any order as to costs.
In conclusion, the jurisprudence surrounding condonation of delay under the GST laws reflects a nuanced approach by various High Courts, balancing procedural rigor with principles of justice and equity. While courts like the Hon’ Allahabad High Court in M/S Yadav Scrap Traders emphasized strict adherence to statutory timelines, others such as the Hon’ Calcutta High Court in S.K. Chakraborty & Sons have upheld the application of Section 5 of the Limitation Act, allowing appeals to be considered on their merits even beyond prescribed periods. The consistent theme across judgments is the recognition of sufficient cause as pivotal in justifying delay, thereby safeguarding the appellant’s statutory right to appeal and ensuring fairness in tax adjudication.
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