M R Traders Vs Union of India (Rajasthan High Court)
Summary: Rajasthan High Court allowed M R Traders’ writ petition and condoned a 160-day delay in filing an appeal against cancellation of GST registration, exercising its constitutional jurisdiction under Article 226. The Court distinguished between the powers of the statutory Appellate Authority and those of the High Court.
It held that Section 107(4) of the CGST Act permits the Appellate Authority to condone delay only for one additional month beyond the prescribed three-month period. This constitutes a jurisdictional cap, and Section 5 of the Limitation Act cannot be invoked by the Appellate Authority to extend that period further. However, the statutory restriction does not curtail the High Court’s constitutional discretion under Article 226 to grant appropriate relief where sufficient cause exists and denial of relief would produce disproportionate consequences.
The Court followed its earlier decision in M/s Molana Construction Company and distinguished subsequent Division Bench decisions that had refused relief on their particular facts. It disagreed with the Calcutta High Court’s view in S.K. Chakraborty & Sons to the extent that it permitted the statutory Appellate Authority itself to invoke Section 5 of the Limitation Act beyond Section 107(4). On the facts, the petitioner explained that the delay resulted from lack of communication and proper advice from its accountant/counsel entrusted with GST compliance. Taking a wholesome view, the High Court accepted the explanation, set aside the appellate order dated 11.10.2024, condoned the 160-day delay and remanded the appeal to the Appellate Authority for adjudication on merits.
Cases Discussed
- M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors., D.B. Civil Writ Petition No. 12076/2024, decided on 26.07.2024, 2024 SCC OnLine Raj 3938 (Rajasthan High Court) — followed for the principle that the statutory limitation under Section 107 binds the statutory authority, but does not by itself restrict the High Court’s constitutional jurisdiction under Article 226 to grant appropriate relief against delayed GST appeals where the facts justify such exercise.
- Ashok Varandani v. Central Board of Indirect Taxes and Customs, D.B. Civil Writ Petition No. 2430/2024, decided on 01.03.2024 (Rajasthan High Court) — referred to in Molana Construction on the effect of expiry of the statutory appellate limitation period; the Court distinguished the context in which that decision and the Supreme Court ruling in Glaxo Smith Kline Consumer Health Care Limited were considered.
- Assistant Commissioner (CT) LTU, Kakinada & Ors. v. Glaxo Smith Kline Consumer Health Care Limited, (2020) 19 SCC 681 (Supreme Court) — considered on the consequence of failure to avail a statutory appellate remedy within the prescribed and extended limitation period and the maintainability of a subsequent writ challenge.
- D.B. Civil Writ Petition No. 7901/2025, order dated 22.04.2025 (Rajasthan High Court) — distinguished on facts; relief had been refused where the petitioner failed to respond to the show-cause notice, did not seek revocation within time and filed a substantially delayed appeal without circumstances warranting discretionary writ relief.
- D.B. Civil Writ Petition No. 20843/2024, order dated 19.08.2025 (Rajasthan High Court) — distinguished as a fact-specific determination in which there was no satisfactory explanation for the default and delay; the Court held that it did not lay down a principle contrary to Molana Construction.
- S.K. Chakraborty & Sons v. Union of India, M.A.T. Nos. 81 & 82 of 2022, decided on 01.12.2023 (Calcutta High Court) — considered but disagreed with to the extent it held that Section 5 of the Limitation Act could empower the statutory GST Appellate Authority to condone delay beyond the outer limit prescribed by Section 107(4); Rajasthan High Court held that the statutory authority has no such unrestricted discretion.
- Kajal Dutta v. Assistant Commissioner of State Tax (Calcutta High Court) — referred to through S.K. Chakraborty & Sons for the view that Section 107 does not state that the Appellate Authority loses jurisdiction beyond the prescribed limitation period; that approach was not accepted by Rajasthan High Court insofar as it permits condonation beyond Section 107(4).
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
