Multi Trading Agencies Drangbal Vs Union Territory of Jammu and Kashmir & Anr. (Supreme Court of India)
Summary: The Supreme Court dismissed the Special Leave Petition filed by Multi Trading Agencies Drangbal against the Jammu & Kashmir High Court’s refusal to interfere with rejection of its delayed GST appeal. The High Court had held that an Appellate Authority under Section 107 of the Jammu & Kashmir Goods and Services Tax Act, 2017 cannot condone delay beyond the additional one-month period permitted by Section 107(4). Although the High Court recognised that its extraordinary jurisdiction under Article 226 could, in an exceptional case involving gross injustice, be exercised notwithstanding the statutory limitation, it found no exceptional circumstances in the petitioner’s case. Before the Supreme Court, the delay involved was three months beyond the statutory condonable period. The Supreme Court expressly relied on Section 107(4), held that such delay could not be condoned and found no case for interference with the High Court’s order. The SLP was consequently dismissed, leaving the High Court’s decision undisturbed.
High Court Proceedings: Statutory Appellate Authority Has Maximum Four-Month Window
The litigation arose from a batch of writ petitions filed by dealers registered under the Jammu & Kashmir Goods and Services Tax Act, 2017. Assessment orders had been passed against them under Sections 73/74 and their statutory appeals under Section 107 were rejected because they had been filed beyond limitation.
The Jammu & Kashmir High Court identified two issues: whether the Appellate Authority could condone delay beyond the additional one month permitted by Section 107(4), and whether the High Court itself could grant relief under Article 226 in exceptional circumstances despite that statutory restriction.
Relying upon its earlier judgment dated 13 August 2024 in WP(C) No.1413/2024 and connected matters, the High Court held that Section 107(1) provides three months for filing an appeal, while Section 107(4) permits the Appellate Authority to condone only a further delay of up to thirty days upon sufficient cause being shown. Beyond that outer limit, the Appellate Authority has no power to entertain the appeal. The High Court also held that the statutory scheme excludes recourse to Section 5 of the Limitation Act for enlarging the Appellate Authority’s power.
Article 226 Jurisdiction Survives, But Only Exceptional Cases Warrant Relief
The High Court nevertheless drew a distinction between the limited statutory jurisdiction of the Appellate Authority and the constitutional jurisdiction of the High Court. It held that the restriction in Section 107(4), although a strong consideration, does not extinguish the High Court’s extraordinary jurisdiction under Article 226 where application of the limitation provision would result in gross injustice.
Such power, however, was not to be exercised routinely. Each case had to be examined on its own facts to determine whether exceptional circumstances justified constitutional intervention.
In the case which ultimately reached the Supreme Court, the assessment order under Section 73 had been passed and communicated through the GST portal on 22 November 2023. The petitioner filed its appeal on 28 May 2024. According to the High Court, there was a delay of three months beyond the additional thirty-day period contemplated by Section 107(4). No separate condonation application was filed, no reason for the delay was stated in the appeal memorandum, and the petitioner did not contend that the assessment order had not been communicated in time or that any legal disability prevented filing the appeal within limitation.
The High Court therefore concluded that no exceptional circumstance existed which warranted exercise of Article 226 jurisdiction to overcome the statutory limitation. The writ petition was not entertained on that basis.
Supreme Court Refuses to Interfere With High Court Order
The petitioner carried the matter to the Supreme Court by Special Leave Petition. The Supreme Court condoned the delay in refiling the SLP and heard counsel for the petitioner.
The Court focused directly on the statutory limitation. It recorded that the delay was three months and held that it could not be condoned in light of the express provisions of Section 107(4) of the Jammu & Kashmir Goods and Services Tax Act, 2017.
Finding no case for interference with the impugned High Court order, the Supreme Court dismissed the Special Leave Petition. All pending applications were also disposed of.
Effect of Supreme Court Order
The Supreme Court’s dismissal leaves undisturbed the High Court’s refusal to grant relief to Multi Trading Agencies on the facts of its delayed appeal. In particular, the conclusion that the statutory Appellate Authority could not condone the three-month delay beyond the additional period expressly permitted by Section 107(4) remained operative in the petitioner’s case.
The Supreme Court’s short order did not separately examine or pronounce upon the High Court’s broader proposition that, despite the statutory restriction applicable to the Appellate Authority, a High Court may exercise Article 226 jurisdiction in an exceptional case to prevent gross injustice. Its stated ground for declining interference was that the three-month delay could not be condoned in light of the express terms of Section 107(4). This distinction is material because the High Court judgment itself treated the statutory power of the Appellate Authority and the constitutional jurisdiction of the High Court as separate questions.
Read Order of Jammu & Kashmir High Court in this case: Appellate Authority Can’t Condone GST Appeal Delay Beyond 30 Days but HC may consider in exceptional cases
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Delay in refiling the Special Leave Petition is condoned.
Heard the learned counsel appearing for the petitioner.
The delay is of three months which cannot be condoned in the light of the express provisions of sub-Section (4) of Section 107 of the Jammu & Kashmir Goods and Service Tax Act, 2017.
Hence, no case is made out to interfere with the impugned order. The Special Leave Petition is, accordingly, dismissed.
Pending application(s), if any, shall also stand disposed of.
