High Court has power to condone delay in filing GST appeal

Summary: The Punjab & Haryana High Court, in Vasudeva Engineering v. Union of India [CWP No. 27468, 18475, 26077, 18591, and 5397 of 2023], addressed the issue of condoning delays in GST appeals. The case involved a petitioner who filed appeals beyond the time limits set by Section 107 of the CGST Act, 2017, which provides a statutory period of 90 days for appeals and an additional 30 days for condonation of delays. The CGST Act does not permit further extensions, making the appellate authority’s rejection legally valid. However, the Court held that under Article 226 of the Constitution, the High Court retains the power to condone delays in exceptional cases. The Court referred to the Supreme Court judgment in Tecnimont Pvt Ltd. v. State of Punjab, which acknowledged the High Court’s jurisdiction to intervene in cases where statutory limitations may result in undue hardship. In exercising this power, the Court emphasized that the CGST Act’s provisions do not restrict the constitutional powers of the judiciary. Thus, while the appellate authority is bound by the statutory timeline, the High Court can consider appeals where justifiable reasons for the delay exist.

The Hon’ble Punjab & Haryana High Court in the case of Vasudeva Engineering v. Union of India [CWP No. 27468, 18475, 26077, 18591 and 5397 of 2023 (O&M) dated October 24, 2024] held that provisions under Section 107 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) are not condemnable to Limitation Act, 1963 (“the Limitation Act”) and therefore, delay cannot be further condoned. However, High Court under Article 226 of the Constitution of India has powers to condone delay in filing appeal.

Facts:

M/s Vasudeva Engineering (“the Petitioner”) had paid the pre-deposit for hearing on the appeal. It was an admitted position that the appeals had been filed beyond the limitation period that even beyond the period which could be condoned under the provisions of Section 107 and Section 35(1) of the CGST Act while the said provision provides for a period of three months for filing of an appeal with additional period of 30 days for condonation, the provisions under Section 107 of the CGST Act are not condemnable to Limitation Act. Therefore, the delay cannot be further condoned.

Issue:

Whether the Hon’ble High Court has power to condone delay in filing appeal?

Held:

The Hon’ble Punjab & Haryana High Court in CWP No. 27468, 18475, 26077, 18591 and 5397 of 2023 (O&M) held as under:

• Noted that, the condonation being provided under the CGST Act itself, in view thereto, the action of the Appellate Authority in rejecting the appeals cannot be said to be illegal or unjustified. However, Hon’ble Supreme Court in the case of M/s Tecnimont Pvt Ltd. v. State of Punjab and others [2019 INSC 1054], the similar issue relating to non-deposit of in cases where the pre-deposit had not been made, and the appeals were rejected before the Supreme Court where the Hon’ble Supreme Court observed that the order was not unjustified in rejecting the appeals but left it open for the High Court to exercise its jurisdiction under Article 226 considering the facts of each case to condone the requirement of pre-deposit in the case of M/s Steel Kart State of Haryana and others [CWP-17348-2024] before this Court, examined an issue where the order challenged in appeal, since it was not in the knowledge of the petitioner within the time prescribed and this Court exercised its powers under Article 226 of the Constitution and directed the Appellate Authority to consider the appeal of the petitioner(s) on merits without going into the question of delay/limitation. Hence, it is apparent as to why the concerned Appellate Authority would be bound by the provisions of the CGST Act, the same would not curtail the powers in any manner provided under Article 226 of the Constitution of the Court to exercise its jurisdiction in the facts of the case and condoned the delay.
• Held that, the powers to hear the appeal in terms of Section 107 of the CGST Act would not be subject to filing of an appeal within the time prescribed wherein, it would not in any manner deprive a person from claiming the right of hearing of an appeal by filing of a writ petition before this Hon’ble High Court for condonation of delay.

Our Comments:

Section 107 of the CGST Act governs “Appeals to Appellate Authority”. Section 107(1) of the CGST Act states that any person aggrieved by any decision or order passed under the CGST Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.

For filing an appeal the statutory period is 90 days from the date of communication of the order, under the CGST Act. The appellate authority is empowered to condone delays up to a further 1 month if adequate cause is displayed. Beyond these 3+1 months, condonation of delay is not explicitly given under the CGST Act, directing to legal challenges and judicial interpretations.

******

(Author can be reached at [email protected])