Karnataka HC Restores GST Appeal as Appellate Authority Ignored Affidavit Explaining Delay

Nadagouda Roadlines Pvt. Ltd. Vs Assistant Commissioner of Commercial Taxes (Audit) (Karnataka High Court)

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The petitioner filed a writ petition before the Karnataka High Court seeking to quash a show cause notice dated 20.02.2025 issued under the CGST Act, 2017 and an appellate order dated 04.05.2026 rejecting an application for condonation of delay and dismissing the appeal.

The respondents had issued show cause notices along with Form DRC-01 for the tax period 2020-21. The petitioner submitted replies to the notices. Subsequently, an order under Section 73(9) of the CGST Act, 2017 was passed on 20.02.2025. Aggrieved by the order, the petitioner filed an appeal before the appellate authority along with an application seeking condonation of delay of 371 days.

The petitioner argued that sufficient cause had been shown for the delay and contended that the appellate authority rejected the application without assigning reasons. Reliance was placed on the Supreme Court decision in Collector Land Acquisition, Anantnag vs. Mst. Katiji and a coordinate bench decision of the Karnataka High Court.

The respondents contended that sufficient cause had not been shown and that the rejection of the application was justified.

The High Court observed that the appellate authority had rejected the condonation application without considering the statements made in the affidavit filed under Section 5 of the Limitation Act, 1963. The Court further noted that the impugned order did not assign any reasons for rejecting the application and dismissing the appeal, and therefore reflected non-application of mind.

Accordingly, the High Court partly allowed the writ petition, quashed the appellate order dated 04.05.2026, and restored the appeal to its original file. The appellate authority was directed to reconsider the application for condonation of delay after granting personal hearing and pass appropriate orders within three months.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

Petitioner filed this writ petition seeking to quash the show cause notice dated 20.02.2025 bearing No.ACCT(A)/BGK/A0/73/2024-25/B-932 issued by respondent No.1 vide Annexure-C and to quash the order dated 04.05.2026 passed in Appeal No.GST-927/2025-26 by respondent No.2 vide Annexure-D.

2. The brief facts leading rise to filing of this writ petition are as follows :-

The respondents issued show cause notices along with Form DRC-01 of the Central Goods and Services Tax Act, 2017 (for short, ‘the CGST Act, 2017’) for the tax period 2020-2021 to the petitioner dated 08.11.2024 and 26.11.2024. The petitioner submitted a reply to the show cause notices. The respondents without considering the contentions raised in the reply notice, passed an order under Section 73(9) of the CGST Act, 2017 vide order dated 20.02.2025. The petitioner aggrieved by the order passed under Section 73(9) of the CGST Act, 2017, preferred an appeal before respondent No.2 along with an application for condonation of delay of 371 days in preferring the appeal. Respondent No.2 vide order dated 04.05.2026 rejected the application for condonation of delay and consequently, dismissed the appeal. The petitioner aggrieved by the order passed by respondent No.2 vide Annexure-D, filed this writ petition.

3. Heard the learned counsel for the petitioner and the learned High Court Government Pleader for the respondents.

4. Learned counsel for the petitioner submits that there was a delay in filing the appeal and the petitioner has shown sufficient cause for not preferring the appeal within time. He submits that respondent No.2 without assigning any reasons has rejected the application for condonation of delay and consequently, dismissed the appeal. He submits that while considering the application for condonation of delay, the Court must be liberal.

5. In order to buttress his argument, he has placed reliance on the decision of the Hon’ble Apex Court in the case of Collector Land Acquisition, Anantnag and another vs. Mst. Katiji and others reported in AIR 1987 SC 1353. Hence, he submits that the impugned order passed by respondent No.2 is contrary to the mandate laid down by the Hon’ble Apex Court in Mst. Katiji’s case (supra). He has also placed reliance on the order passed by the Co-ordinate Bench of this Court in the case of Sri. Jaganu S/o Punnu Jadhav vs. Assistant Commissioner and Another in W.P.No.204128/2025 disposed of on 24.04.2026. Hence, on these grounds, he prays to allow the writ petition.

6. Per contra, learned High Court Government Pleader supported the impugned order and submitted that the petitioner has not shown sufficient cause for condoning the delay in preferring the appeal and hence, respondent No.2 has rightly rejected the application and consequently dismissed the appeal. Therefore, on this ground, she prays to dismiss the writ petition.

7. Perused the records and considered the submissions of the learned counsel for the parties.

8. It is an undisputed fact that respondent No.1 issued show cause notice dated 20.02.2025 to the petitioner under Section 73(9) of the CGST Act, 2017 and the said notice was replied by the petitioner. The petitioner aggrieved by the said notice preferred an appeal before respondent No.2 along with an application for condonation of delay of 371 days in filing the appeal. Respondent No.2 without considering the statement made in the affidavit accompanying the application under Section 5 of the Limitation Act, 1963, has proceeded to reject the application.

9. I have perused the impugned order passed by respondent No.2, wherein no reasons were assigned for rejecting the application for condonation of delay and consequently, the appeal was dismissed. As such, the impugned order passed by respondent No.2 is without application of mind. Hence, on this ground alone itself, the impugned order passed by respondent No.2 is liable to be set-aside.

10. In view of the above discussion, I proceed to pass the following:

ORDER

i) The writ petition is allowed in part;

ii) The order dated 04.05.2026 passed by respondent No.2 vide Annexure-D is hereby quashed;

iii) The Appeal in No.GST-927/2025-26 is restored to its original file;

iv) The petitioner is directed to furnish the copy of the order passed by the Co­ordinate Bench of this Court in W.P.No.204128/2025 to respondent No.2;

v) Respondent No.2 is directed to reconsider the application for condonation of delay in terms of the order passed by the Co­ordinate Bench of this Court in W.P.No.204128/2025 dated 24.04.2026;

vi) Respondent No.2 is directed to pass an order after providing an opportunity of personal hearing to the petitioner and thereafter pass appropriate orders within a period of three months;

vii) The petitioner is directed to appear before respondent No.2 on 26.05.2026.