Sri Sai Communications Vs Superintendent of Central Tax & Another (Telangana High Court)
Telangana High Court Sets Aside Time-Barred GST Appeal Rejection; Permits Taxpayer to Explain Delay and Contest GST Demand
Summary: Telangana High Court set aside an order-in-appeal dated 28.11.2025 rejecting M/s. Sri Sai Communications’ GST appeal on limitation and remitted the matter to the appellate authority for fresh consideration. The appeal had been filed only four days beyond the three-month period plus the further one-month condonable period contemplated under Section 107(1) and (4) of the CGST Act, 2017. The petitioner relied upon its communication dated 09.12.2024 to the Proper Officer contending that, because of reduction of ITC in the annual GSTR-9 for FY 2019-20, it was not liable for the disputed CGST and SGST demand of ₹4,53,510. The Court observed that this communication appeared not to have been dealt with and permitted the petitioner to rely upon the additional plea both to explain the delay and to contend that no tax was payable due to the reduction of ITC shown in GSTR-9. The appellate order was accordingly set aside. The appellate authority was directed to reconsider the matter and, if satisfied regarding the delay, decide the appeal on merits in accordance with law. The High Court itself did not determine the disputed tax liability.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Mr. Srinarayan Toshniwal, learned counsel appearing for the petitioner and Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC), appearing for the respondents.
2. The petitioner has approached this Court against the order-in-appeal dated 28.11.2025 pertaining to the tax period 2019-20 arising out of the order-in-original dated 14.08.2024 and the summary of the order in Form GST DRC-07 dated 26.08.2024 in a proceeding under Section 73 of the Central Goods and Services Tax Act, 2017 (for short, ‘the Act’). Apart from the order-in-appeal, both the show-cause notice dated 28.05.2024 and the summary of the show-cause notice in Form GST DRC-01 dated 12.08.2024, attachment to Form GST DRC-01 dated 28.05.2024, the order-in-original dated 14.08.2024 and the summary of the order in Form GST DRC-07 dated 26.08.2024, are also assailed in the present Writ Petition.
3. The appeal was rejected on the ground of limitation having been filed after three months plus one month condonable period. In the present Writ Petition, apart from the plea relating to belated service of summary of show-cause notice in Form GST DRC-01 dated 12.08.2024, to which the petitioner could not furnish any reply before the order-in-original was passed on 14.08.2024, the petitioner has also taken a plea that a communication was made on 09.12.2024 to the Superintendent, Central Excise and Service Tax, Karimnagar Central GST (Urban) Range, to the effect that the required documents for the tax period 2019-20 would show that it is not liable to pay the demand of CGST and SGST to the tune of Rs.4,53,510/- as though it has not taken into consideration the debit note for the month of June, 2019, while filing GSTR-3B for the Financial Year 2019-20 and as a result, reduced the Input Tax Credit (ITC) from the whole ITC in the GSTR-9.
4. Learned counsel for the petitioner submits that if the said fact was taken note of, there was no tax liability upon the petitioner as adjudicated in the impugned order-in-original. This fact could not be brought to the notice of the proper authority and could not be raised before the appellate authority since the appeal was dismissed on the ground of delay. He further submits that if the communication dated 09.12.2024 is taken into account, the appeal may not be time barred as it was filed only four days after the expiry of three months plus one month condonable period. He further submits that therefore the matter may be remanded to the appellate authority to consider this issue afresh. He refers to a decision rendered by this Court in W.P.No.17241 of 2026 dated 15.06.2026, wherein the pendency of a rectification application was taken into account in a case where the appeal was dismissed on the ground of time barred and the petitioner therein had not been able to raise such plea in the delay condonation application. It is further submitted that the facts in the present case are similar to the said case, as the petitioner herein, before approaching the appellate authority, had also approached the Proper Officer through a communication for dropping the demand. Therefore, if the appeal is reheard and decided on merits, this issue can be properly appreciated.
5. Learned Senior Standing Counsel for CBIC submits that the appeal has been dismissed on the ground of limitation though only four days beyond the four months period provided under Section 107(1) and (4) of the Act. The petitioner has a remedy of going in appeal before the Goods and Services Tax Appellate Tribunal (GSTAT) under Section 112 of the Act with statutory pre-deposit and a delay condonation application. However, if this Court so directs, the petitioner’s additional ground of having moved the Proper Officer through communication dated 09.12.2024 for dropping of the demand may be taken before the appellate authority to explain the delay if any in approaching the said appellate authority. However, he submits that the communication dated 09.12.2024 does not appear to be a rectification application with any proof of service.
6. We have considered the submissions of the learned counsel for the parties. It appears that the point as regards infirmity in the adjudication proceedings has been taken up after the order-in-appeal was passed rejecting the appeal on the ground of limitation. It however appears that the petitioner took a plea before the Proper Officer vide communication dated 09.12.2024 to show that because of reducing the ITC from the whole ITC in the annual return GSTR-9 for the Financial Year 2019-20, the petitioner will not be liable to pay the demand as per the adjudication order. It further appears that the said communication has not been dealt with.
7. In these circumstances, we deem it proper to allow the petitioner to take this additional plea before the appellate authority to explain the delay and also the ground that it is not liable to pay the tax as per the order-in-original due to reduction of ITC shown in the annual GSTR-9 returns. The appeal has been rejected on the ground of delay of only four days.
8. Therefore, the impugned order-in-appeal dated 28.11.2025 is set aside and the matter is remitted to the appellate authority for consideration afresh. The petitioner is granted liberty to explain the delay by taking the aforesaid additional grounds. In case, the appellate authority is satisfied on the point of delay, it may proceed to decide the appeal on merits in accordance with law.
9. The Writ Petition is accordingly disposed of. There shall be no order as to costs.
Miscellaneous applications pending, if any, shall stand closed.
