SEPL Infra Private Limited Vs Joint Commissioner of Commercial Taxes (Karnataka High Court)
Summary: The Karnataka High Court partly allowed the writ petition filed by SEPL INFRA PRIVATE LIMITED concerning a delayed statutory appeal under Section 107 of the CGST Act arising from proceedings for FY 2020-21. A show cause notice dated 27.11.2024 under Section 73 was followed by an Order-in-Original dated 08.01.2025. The petitioner’s case was that the order was not uploaded under the regular “View Notices and Orders” tab on the GST portal but under “Additional Notices and Orders”, and that it became aware of the order only on 08.09.2025. The petitioner immediately sought rectification, which was rejected on 28.10.2025, and thereafter filed an appeal under Section 107 on 21.01.2026, along with a pre-deposit of ₹4,31,246/-. The appeal was dismissed on 15.05.2026 as beyond the statutory limitation and condonable period. During pendency, a garnishee order dated 12.03.2026 had also been issued. The petitioner contended that its tax liability, including the alleged excess Input Tax Credit (ITC), interest and penalty, had not been adjudicated on merits. The Court noted that the original order had not been uploaded in the regular portal tab and that, irrespective of competing contentions concerning knowledge of the order, the petitioner’s substantive challenge to the tax demand had never been examined in the appeal. It therefore considered it expedient to provide another opportunity, emphasising that an appeal is a valuable statutory right which ordinarily ought not to be taken away. The Court relied on Simplex Infrastructures Ltd., and Another Vs. The Joint Commissioner of Central Tax and Others, where the Karnataka High Court had permitted an appeal to be pursued in peculiar circumstances; Shri. Vishal Durgadas Jaiwant vs. The Joint Commissioner of Commercial Taxes, where delay was condoned on a justice-oriented approach in circumstances involving an ITC mismatch; Shaik Abdul Azeez vs. State of A.P., where the Andhra Pradesh High Court exercised writ jurisdiction to condone delay beyond the statutory condonable period; and M.R. Traders, through its Proprietor Shri Jagdish vs. Union of India, through Secretary, Ministry of Finance, Department of Revenue and Others, which distinguished the statutory limits binding the appellate authority from the constitutional power of the High Court under Article 226. The Court particularly noted that Section 107 operates as a statutory limitation on the appellate authority, while a Constitutional Court may, in appropriate cases, intervene to prevent denial of a remedy. In the present case, the petitioner had also made the pre-deposit and the garnishee order had been issued while the appeal was pending. The Court accordingly quashed the garnishee notice dated 12.03.2026, set aside the appellate order dated 15.05.2026, restored Appeal No.APL/GST-418/2025-26 and condoned the delay. The petitioner was directed to appear before the Joint Commissioner on 20.07.2026 at 03.00 p.m., without further notice, and the appellate authority was directed to adjudicate the appeal in accordance with law after giving adequate opportunity of hearing. All contentions on merits were expressly kept open. The Court also referred to the broader legislative purpose of the GST regime as a comprehensive fiscal reform intended not merely for revenue collection but also to facilitate trade, commerce and business continuity, observing that remedies should not become illusory on hyper-technical grounds. It further noticed the reasoning that missed appellate deadlines should not, in appropriate circumstances, permanently exclude a taxpayer from the GST framework where the taxpayer seeks to comply with tax, interest and penalty obligations and rectify defaults. The final directions were confined to restoring the statutory appeal and preserving an opportunity of adjudication on merits; the Court did not decide the underlying ITC, interest or penalty dispute, and expressly kept all merits contentions open.
