Case Law Details
RPC PSIPL JV Vs State of Rajasthan (Rajasthan High Court)
In RPC PSIPL JV vs State of Rajasthan, the Rajasthan High Court examined a writ petition challenging an order dated 03.05.2025 passed under Sections 74 and 50 of the RGST Act, 2017 for the financial year 2018–19. By this order, a demand of ₹16,63,946 (CGST ₹8,31,973 and SGST ₹8,31,973) along with interest and penalty was raised against the petitioner.
The petitioner approached the Court on the ground that its statutory appeal could not be entertained due to expiry of the limitation period prescribed under Section 107(1) of the Act. The appellate authority was not registering or entertaining appeals filed beyond three months, with an additional one-month condonable period.
The petitioner relied on earlier Division Bench judgments of the same Court, including Molana Construction Company and Man Singh Tanwar, where relief had been granted in similar circumstances by directing appellate authorities to consider appeals on merits upon compliance with statutory deposits and other requirements.
The petitioner submitted that after issuance of a show cause notice dated 22.12.2023, one of its key partners, Rajendra Prasad, who managed the firm’s operations, suffered from a severe medical condition, was hospitalized in February 2024, and subsequently passed away on 14.02.2024. Due to these circumstances, the petitioner could not file the appeal within the prescribed time. It was further contended that the demand was disputed and that the petitioner had valid grounds to challenge the impugned order.
The respondents opposed the petition, arguing that under Section 107, appeals filed beyond the prescribed limitation could not be entertained. They also contended that the petitioner had not made out a sufficient case to justify the delay and that the appeal had not even been filed, making the writ petition not maintainable.
The Court noted that it was undisputed that appeals filed beyond the statutory limitation period were not being entertained by the appellate authority. It also referred to earlier Division Bench decisions holding that while statutory authorities are bound by limitation provisions under Section 107, such limitations do not strictly apply in writ proceedings. The Court reiterated that the GST framework is intended to facilitate business activities and that the right to appeal should ordinarily be decided on merits rather than being defeated on technical grounds.
The Court examined the petitioner’s explanation for delay and found that the illness and death of a key partner, supported by medical records and death certificate, constituted sufficient cause. It also noted that these facts were not disputed by the respondents. The Court concluded that the petitioner was prevented from filing the appeal within time for reasons beyond its control.
Accordingly, the Court exercised its jurisdiction under Article 226 and directed the appellate authority (Joint Commissioner, Bikaner) to register and decide the petitioner’s appeal on merits, provided the appeal is filed within one month from the date of the order. This direction was made subject to the petitioner depositing late fees, penalty, and other statutory pre-deposits required for entertaining the appeal.
The writ petition was allowed with these directions.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
By way of the present writ petition, the petitioner seeks to challenge the order dated 03rd May 2025 (Annexure-4) passed by the Assistant Commissioner, Circle-A, Hanumangarh whereby exercising powers under section 74,50 of RSGT Act, 2017 for the financial year 2018-2019 a demand of Rs.16,63,946/- (SGST of Rs.8,31,973/- + CGST of Rs.8,31,973/-) was raised against the petitioner along with interest and penalty.
2. The petitioner has approached this Court stating that the appeal is not being entertained for the reason that the period of 30 days has expired as per the provision of section 107(1) of the RGST Act, 2017 and the appellate authority is, therefore, not entertaining or registering the appeal. Learned counsel for the petitioner submits that the issue in hand is no longer res-integra in view of the judgment passed by the Division Bench of this Court in D.B. Civil Writ Petition No.12076 of 2024 titled “M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors” wherein this Hon’ble Court vide its judgment dated 26th July 2024 had allowed the writ petition and directed the appellate authority to decide the appeal of the petitioner- Firm therein after deposition of late fee, penalty and other statutory deposits for entertaining the appeal. As also reliance has been placed upon the judgment passed by the Division Bench in D.B. Civil Writ Petition No.14658 of 2024 titled “Man Singh Tanwar Commissioner, Central goods and Services Tax Department & Ors.” decided on 09th September 2024.
3. After arguing for some time, Mr. Sharad Kothar, the learned counsel appearing for the petitioner-firm does not press the alternative prayer vide clause (iii) and submits that challenge to the provisions under section 107(4) of the CGST/RGST Act, 2017 may be left open at this stage.
4. The learned counsel for the petitioner further submits that post issuance of the show cause notice dated 22nd December 2023, Rajendra Prasad was diagnosed with severe medical ailment and was admitted in a hospital in the month of February 2024 and ultimately succumbed to the disease and expired on 14th February 2024. It has been asserted that Rajendra Prasad was a key partner in the joint venture and was responsible for managing the entire operations of the partnership firm. The learned counsel for the petitioner thus submits that the appeal could not be filed within the time framed and thus for reasons beyond the control of the petitioner- Firm, the petitioner has been rendered remedy less inasmuch as the department is not entertaining the appeal which are being filed beyond the period of 3 months with an extended period of further one month as provided under section 107 of the CGST Act, 2017. He further submits that the amount in question is disputed and the petitioner has got a strong ground to challenge the correctness of the order impugned.
5. The learned counsel for the respondents on the other hand submits that in view of the provisions under section 107, the appeal, if at all filed by the petitioner, could not be entertained as the period of limitation had expired. It has further been asserted that the petitioner had not been able to make out any case worth consideration to show that the appeal could not be filed within the prescribed time limit. He further asserts that as such the appeal has not at all been filed by the petitioner and, therefore, writ petition in question is not even maintainable.
6. Heard learned counsel for both the sides. The learned counsel for the respondents is not in a position to dispute that the appeal, if at all filed are not been entertained or if they are being filed beyond the period of three months with an extended period of further one month, from the date of passing of the order passed by the Assistant Commissioner. Thus, the argument of the petitioner has substance that even if appeal would not be filed the same would not had been entertained by the appellate authority.
7. An identical issue came up for consideration of this Hon’ble Court where appeal was filed, however, the same was returned to the petitioner therein. The Division Bench of this Hon’ble Court in D.B. Civil Writ Petition No.12076 of 2024 “M/s. Molana Construction Company v. Central Goods and Service Tax Department & Ors.” has held as under:
“The CGST Act has been enacted to levy taxes on manufacture of certain goods in the form of Central Excise Duty and to consolidate certain provisions of service tax and inter-state sale of goods in the form of Central Sales Tax as also to levy tax by the State Governments on retail sales in the form of Value-added Tax, entry of goods in the form of Entry Tax, Luxury Tax etc. The provisions under the CGST Act besides seeking levy and calculation of taxes are also intended to facilitate commercial and business activities. The legislative intentment in this regard is manifest in the provisions under Section 30 of the CGST Act. In the backdrop of such legislative intentment, the provisions under Section 107 of the CGST Act cannot be frustrated on mere technicalities. A right to appeal as provided under the statute must be decided on merits irrespective of some laches or delay on the part of the Assessee. This is by now too well-settled that the statutory provisions of limitation under Section 107 of the CGST Act would bind the statutory authority which cannot condone the delay except the circumstances envisaged thereunder but such limitations are not applied in a writ proceeding.
5. The powers under Article 226 of the Constitution of India are founded on justice, equity and good conscience and are exercised for public good. Mr. Mahaveer Bishnoi, the learned counsel for the Revenue has referred to a decision of this Court in D.B. Civil Writ No.2430/2024 “Ashok Varandan Vs. Central Baurd of Indirect Taxes and Customs & Ors.” (dated 1st March 2024) to submit that in view of the express bar of limitation under Section 107 of the CGST Act the present writ petition is not maintainable. In this context, we may indicate that the issue in “Ashok Varandani” pertained to filing of statutory return in form GSTR/3B and connected issues. This Court referred to the decision in “Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs. Glaxo Smith Kline Consumer Health Care Limited” reported in (2020) 19 SCC 681, wherein the Hon’ble Supreme Court observed that if the Assessee did not avail the alternative remedy of statutory appeal even within the extended period of limitation by seeking condonation of delay then a writ petition shall not be entertained. Quite apparently, the language employed in “Glaxo Smith Kline Consumer Health Care Limited (supra)” reflects that the Court has ample powers to condone the delay in preferring the appeal.”
8. Identical observations were made by the Division Bench of this Court in B. Civil Writ Petition No.14658 of 2024 “Man Singh Tanwar v. Commissioner, Central goods and Services Tax Department & Ors.”.
9. In the present case as regards the difficulty on the part of the petitioner to contest the case or not having the knowledge of passing of the order dated 03rd May 2024, the reasons have been pleaded in para 8 and 9 of the writ petition. For sake of convenience, the same are reproduced as under:-
“8. That, after the Show Cause Notice under Section 74 of the CGST Act was issued to the Petitioner on 22.12.2023, Shri Rajendra Prasad was diagnosed with severe medical ailment, due to which, he was compelled to be admitted to the hospital in the month of February 2024. Thereafter, fighting for his life for almost 20 days, Shri Rajendra Prasad left for his heavenly abode. A true and correct copy of Death Certificate issued by the Government of Haryana is annexed herewith and marked as Annexure-8. True and correct copy of the Hospital record of Shri Rajendra Prasad is annexed herewith and marked as Annexure-9.
9. That, the Petitioner’s hardship appeared never-ending, wherein, on the one hand, one of the Key partners of the JV was dead and on the other hand, the pending proceedings under Section 74 of the CGST/RGST Act came to be concluded, whereby, a demand of Rs. 16,63,946/- was raised purportedly due to increased expenditure on purchase of cement.”
10. The averments made in the above mentioned paragraphs have been supported with the relevant medical documents and there is no counter to the same on the part of the respondents. The work of the petitioner’s partnership firm been taken care by one of the partner Shri Rajendra Prasad has not at all been disputed as also the fact of his being hospitalized and ultimately succumbing to the disease is also not disputed. Rather, the medical documents placed on record fortify the above mentioned fact, as also the death certificate placed on record showing the date of death of the main partner Shri Rajendra Prasad on 14th Februaty 2024. Thus considering the above mentioned peculiar facts and circumstances of the present case, it is clear that the petitioner could not file the appeal within time for the reasons beyond its control and the petitioner has been able to show sufficient cause for not filing the appeal within time.
11. For the foregoing reasons, we are inclined to entertain the present writ petition and the appellate authority i.e. Joint Commissioner, Bikaner (State Tax) is directed to register and decide the appeal of the petitioner on merits, if the same is filed within a period of one month from today, subject to the petitioner firm depositing late fees, penalty and other statutory deposits for entertaining the appeal.
12. D.B. Civil Writ Petition No.7260 of 2025 is allowed in the aforesaid terms.
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