The timelines prescribed under Section 107 of the Central Goods and Services Tax Act [hereinafter referred to as the CGST Act] reflect the legislature’s intent to ensure prompt resolution of tax disputes. Clause (1) of this section provides that an appeal against an order issued under the CGST, SGST, or UTGST Acts must be filed with the Appellate Authority within three months from the date of communication of the order. Clause (4) further allows the Appellate Authority to condone delays up to an additional one month if it is satisfied that the appellant was prevented by sufficient cause from filing within the initial period. However, delays beyond this statutory limit can only be addressed through the extraordinary writ jurisdiction of the High Courts under Article 226 of the Constitution, which is invoked only in exceptional circumstances.
The Kerala High Court’s recent judgment in Baiju George v. Commissioner of Goods and Service Taxes Department brings this issue into focus. In this case, the petitioner cited a medical condition—advised bed rest for a “fatty liver“—as the reason for failing to file appeals within the stipulated timeline. The orders in question, issued on February 11 and 12, 2020, were only challenged in December 2023—after a delay of nearly four years. The Appellate Authority rejected the appeals as time-barred, and the High Court upheld this decision, observing that the medical certificate presented by the petitioner lacked credibility and did not justify the inordinate delay. The court concluded that the petitioner failed to establish grounds warranting extraordinary relief under its writ jurisdiction. The sections below explore the judicial evolution of High Courts’ power to condone delays in exceptional cases under Article 226, beyond the constraints of Section 107.
What Situations have the Courts Considered “Exceptional”?
The Kerala High Court in the case of Penuel Nexus Pvt. Ltd. v. The Additional Commissioner Headquarters (Appeals), Ernakulam (2023) pointed out that the CGST Act is a special statute, functioning as a self-contained code. It held that Section 107 of the Act, which governs appeals, has an inherent mechanism for handling limitations and thus impliedly excludes the application of the Limitation Act. The Limitation Act applies to a special statute only if it is explicitly extended to it. Furthermore, the court emphasised that the provisions of a fiscal statute, such as the CGST Act, must be interpreted “strictly and narrowly.” This reasoning was upheld by the Allahabad High Court in April 2024 in M/S Modern Steel v. Additional Commissioner and Another. In this case, the respondents relied on the Kerala High Court’s judgment in Penuel Nexus to argue against the admission of a writ petition filed under Article 226 of the Constitution, on the grounds of limitation under Section 107 of the CGST Act. The petitioner had not pleaded any plausible grounds for condoning the delay in filing the appeal, except that the delay occurred due to a mistake. Consequently, the Court refused to interfere, and held that once the Appellate Authority dismisses the appeal under Section 107(4), the Limitation Act has no application to the case, thereby reiterating that the Act is a self- contained code with an inbuilt mechanism for limitation.
More clarity to the issue at hand was added in M/S Multi Trading Agencies v. UT of J&K (October 2024), where the J&K High Court addressed seven writ petitions seeking condonation of delays in filing appeals against adjudicating authorities’ orders. The court dismissed a petition involving a six-month delay, where the petitioner cited personal challenges related to caring for a specially-abled child as the reason for missing the statutory deadlines. The court found that such reasons did not constitute “exceptional circumstances” necessary to invoke its extraordinary jurisdiction. It stated that “The petitioner has herself remained negligent and remiss in preferring the appeal within time and, therefore, must suffer its consequences.” Three additional petitions were similarly dismissed on the grounds that the petitioners had no legal disability preventing them from filing within the prescribed timeframe. However, the court allowed three petitions where the assessing authority failed to account for tax already deducted at source when issuing the assessment order. This oversight was deemed a sufficient basis to condone the delay, illustrating the court’s willingness to balance strict statutory interpretation with fairness and prevent injustice. It is evident that the courts have consistently emphasised that while compliance with procedural timelines is critical to maintaining fiscal discipline, it must not come at the cost of fairness or constitutional guarantees.
Appeals Against GST Registration Cancellations: A Liberal and Rights-Based Approach
The issue of GST registration treads on a different plane, engaging fundamental rights under Article 19(1)(g) and Article 21 of the Constitution. The cases involving GST registration cancellations directly impact an individual’s ability to conduct business and participate in the economy. This raises concerns of a comparatively higher magnitude, where courts have often diluted the aspects of procedural strictness to bring them at par with constitutional guarantees of equal opportunity and promotion of trade and commerce.
In this regard, the J&K High Court in the case of clarified that limitation periods are procedural in nature. It held that the statutory prohibition under Section 107(4) of the CGST Act, 2017, which bars condonation of delays exceeding one month, does not preclude a constitutional court from exercising its extraordinary jurisdiction to ensure substantial justice. The court emphasised that while statutory prohibitions are significant, they cannot override the High Court’s discretion to intervene in cases where rigid application of limitation rules would result in gross injustice.
Furthermore, the Madras High Court, in Tvl. Suguna Cutpiece Center, Salem v. The Appellate Deputy Commissioner (ST) (GST), Salem and Erode & Another (31 January 2022), admitted several writ petitions filed under Article 226 of the Constitution. These petitions were filed by individuals who had either failed to file appeals against orders cancelling their GST registration under Section 107 of the Act within the prescribed time, or had filed appeals belatedly, which were subsequently not entertained and rejected by the Appellate Authority. The Court held that the provisions of the CGST Act cannot be construed in a manner that prevents an assessee from obtaining or reviving a lapsed or cancelled GST registration. Such an interpretation, the court emphasized, would contravene Article 19(1)(g), read with Articles 14, and 21 of the Constitution of India. Article 19(1)(g), which guarantees the right to practice any profession or carry out any trade, business, or occupation to every citizen of India, cannot be arbitrarily denied and is only subject to reasonable restrictions. The court highlighted that the government’s intention is to enable entities to file fresh applications or seek revocation of registration cancellations. Excluding petitioners from the GST framework would not only lead to revenue leakage but also isolate them from the mainstream economy, thereby defeating the purpose of GST Act. The core objective of GST registration, the court observed, is to ensure tax collection on goods and services, which contributes to government revenue. Denying such registration would inadvertently exempt the petitioners from paying GST, even if they continue supplying goods or services without registration. Thus, the court invoked its powers under Article 226 of the Constitution to quash the impugned orders, allowing the petitioners to revive their GST registration and regularize their defaults.
Conclusion
The judicial interpretations of the CGST Act reveal an evolving effort to reconcile strict statutory mandates with constitutional principles of fairness and equity. Delays caused by administrative errors or genuine oversights may warrant judicial intervention to prevent injustice to parties. Moreover, in cases affecting fundamental rights of the citizens, such as GST registration cancellations, constitutional courts have often adopted a rights-based approach, prioritising economic participation over procedural rigidity. Conversely, negligence or vague personal reasons fail to meet the threshold for exception circumstances to condone delays in filing appeals. This serves as an important reminder that extraordinary relief under Article 226 of the Constitution must remain an exception, not the norm
The Union Budget 2024-25 reflects a step in this direction with the proposed amendment to Section 112 of the CGST Act. It seeks to allow the three-month period for filing appeals before the appellate tribunal to commence from the date notified by the Government, replacing the earlier practice of starting the limitation period from the communication of the order. This reform aims to provide clarity and streamline the appeal process by giving the Government flexibility to specify the start date, potentially alleviating procedural challenges faced by appellants. However, it also raises questions about the necessity of further statutory reforms to clearly define “exceptional circumstances” under Section 107 and related provisions, thereby reducing the burden on constitutional courts to full these gaps. Introduction of a graded limitation regime could provide a structured mechanism for assessing delays based of the nature of hardship- distinguishing between negligence and unavoidable circumstances. Moreover, introducing a detailed, non-exhaustive list of conditions that qualify as exceptional under Section 107 would reduce reliance on judicial interpretations. Moving forward, implementing a digital appeal tracking system with automated reminders for taxpayers could enhance compliance and reduce the incidence of delays. The CGST Act must remain both a tool for effective revenue collection and a mechanism for preserving fairness and inclusivity in the tax regime.
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