Filling GST Appeal under section 107 after 4 months from order date: Key Insights

Summary: Appeals under Section 107 of the CGST Act, 2017 must be filed within 3 months from the date of communication of an adjudicating authority’s order, with an additional 1-month extension for valid reasons, bringing the total allowable time to 4 months. After this period, Section 5 of the Limitation Act, 1963 allows courts to accept appeals if a valid reason for the delay is presented. However, multiple judicial decisions indicate that tax laws like the CGST Act operate as self-contained codes, and courts generally do not condone delays beyond the statutory limit of 4 months, even for valid reasons. The Supreme Court, in cases like Vishwanath Traders, held that no extraordinary relief would be provided beyond the prescribed timeframe. Similarly, in Singh Enterprise and M/s Yadav Steel, the courts maintained that GST, being a special statute, overrides Section 5 of the Limitation Act, preventing any authority from condoning delays beyond 4 months. However, writ petitions under Article 226 of the Indian Constitution may still be entertained if there is a violation of fundamental rights, natural justice, or orders passed beyond jurisdiction. Ultimately, taxpayers are advised to remain vigilant about appeal deadlines as courts are unlikely to grant relief under the Limitation Act in cases of tax disputes.

• Appeal under section 107: – As per Section 107(1), a person aggrieved by the order of adjudicating Authority may prefer an appeal within the time period of 3 months from date of communication of order.

• Section 107(4) provides that appeal can be condone by the appellant authority for a further period of 1 month.

A combined reading of both the subsection leading us to a conclusion that an appeal can be filled within in 4(3+1) months from the date of communication of order and not later than that.

• Section 5 of the limitation Act, 1963 allows an appeal to be filled even after the limitation period is expired, if the applicant can convivence the court that they have a valid reason for not filling the appeal within the time limit.

 Valid reason is the discretion of the courts. Meaning if court consider it valid then they can provide such extended condonation.

• Section 107 of the CGST Act, 2017 Vs Section 5 of the limitation Act, 1963: – A combined reading of the section 107(1) and section 107(4) reaches us to a conclusion that only 4 months’ time period is allowed from the date of order. But, on the other hand limitation Act, 1963 provides that appeal can be made even after the expiry of that 4 months obviously for valid reason.

All this has led to a question in mind that whether an appeal can be filled even after the time period of 4 months? 

• The answer to the above question is being replied in lot of judicial decision so far, let us understand them one by one: 

1. In the case of Vishwanath traders (SC): –

• • Facts: – The first appellant authority rejected the appeal on the ground of limitation. Petitioner has filed a writ petition in Hon’ble Patna high court. And the same was rejected. Then, SLP was filled with the hon’ble supreme court of India.
  • Hon’ble supreme court of India in its decision: –
    • Opined that, the taxpayer was not diligent enough to claim remedy given in section 107(4).
    • Therefore, held that, find no reason to allow to provide an extraordinary remedy u/s 226 of the Indian constitution.
    • Order that, no relief shall be provided in such a case.

2. In case of M/s Yadav Steel (West Bengal HC): – held that, GST Law is special statue and a self-contained code in itself and Section 5 of the Limitation Act is not applicable to give power to First Appellate authority to condone the delay beyond statutory time limit allowed.

3. Singh Enterprise (SC): held that, after completion of 4 months (maximum time limit to appeal) appellant authority is barred from examining the cause and condone the delay even for a good and sufficient cause. 

• Conclusion: – 

• From the above decisions, it must be clear that writ courts are not entertaining the petitioners with section 5 of the limitation Act, 1963 to provide an extraordinary relief. 

• GST Act in itself a separate code where the limitation period is specifically provided u/s 107 of the CGST Act, 2017. Not only this the alternate remedy is being provided in the Act itself under section 107(4).

• But, the question now comes to our mind is that does that means that “writ cannot be filled when alternative remedy is been granted in Act itself?”

• Well the answer will be No. Availability of Alternative remedy does not mean or, does not necessarily mean that one cannot file a writ. Writ can be filled under article 226 provided that its a case of violation of fundamental rights, violation of principal of natural justice, order passed beyond jurisdiction or, act being ultra vires.

 Suggestion: –Limitation Act, 1963 cannot be used as a medium especially in taxation laws where such limitation is provided for the purpose of strong compliances. Thus, appeal after the period of 4 months will not be entertained even by the writ court. Its always and always better to keep a regular check on notices being served by the department.

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Disclaimer: – The views expressed in the above article is based on the research conducted by the author & shall not be construed as a legal advice.