New Kailash Suppliers Vs State of Gujarat & Ors. (Gujarat High Court)
The Gujarat High Court set aside an order rejecting a GST appeal on the ground of limitation and remanded the matter for fresh consideration. The petitioner had challenged an order dated 12.08.2024 by first filing a rectification application under Section 161 of the Goods and Services Tax Act, 2017 on 05.11.2024. Although the rectification application was statutorily required to be decided within three months, it was actually rejected on 19.03.2025. Thereafter, the petitioner filed an appeal under Section 107 on 25.03.2025.
The appellate authority rejected the appeal as time-barred, holding that it was filed beyond the statutory limit of three months plus one month and that it had no power to condone delay. Before the High Court, the petitioner contended that the limitation period should commence from 20.03.2025, i.e., the day following rejection of the rectification application, and that the appeal filed within five days was well within time. The State argued that the petitioner had not separately challenged the rectification order and that the appeal was delayed by more than 225 days from the original order.
The Court observed that while neither the appellate authority nor the High Court has power to condone delay beyond 120 days, the crucial issue was the correct computation of limitation. It held that the filing and disposal of the rectification application was a vital factor directly impacting the limitation period under Section 107. Since the rectification application was rejected only on 19.03.2025 and the appeal was filed shortly thereafter, the appellate authority was required to examine the explanation provided in Form GST APL-01 before rejecting the appeal. Failure to do so rendered the rejection unsustainable. Accordingly, the High Court quashed the impugned order and remanded the matter to the appellate authority for fresh decision after granting an opportunity of hearing and passing a reasoned order.
