KLM Power And Infrastructure Co. Vs State of Rajasthan (Rajasthan High Court)
Summary: The Rajasthan High Court considered a writ petition filed by M/s KLM Power And Infrastructure Co. challenging the appellate order dated 19.06.2026, by which its appeal against the order-in-original dated 18.03.2024 was rejected as time-barred. The petitioner also sought removal of the hold/lien marked on its bank accounts. The order-in-original raised a GST demand of Rs.16,11,302/- for Financial Year 2018-19 on account of wrongful availment of Input Tax Credit and excess outward tax in Form-GSTR-1 as compared to Form-GSTR-3B.
The appeal against the order-in-original was filed on 09.10.2025, involving a delay of 450 days. The petitioner contended that the delay was bona fide and arose from circumstances beyond its control. According to the petitioner, the order-in-original dated 18.03.2024 had been uploaded on the GST portal under the head “Additional Notices and Orders” instead of “Notices and Orders” and had never been served manually or in hard copy. Recovery proceedings were thereafter initiated on 19.04.2024 by issuing Form GST DRC-13 under Section 79(1)(c) of the CGST Act to the petitioner’s banker, directing remittance of the alleged outstanding amount of Rs.16,09,249/-. A hold/lien was consequently marked on the petitioner’s bank account.
The petitioner stated that it became aware of the recovery proceedings only on 07.10.2025 after receiving a telephone call from an officer of the respondent department. It thereafter filed the statutory appeal on 09.10.2025, specifically recording 07.10.2025 as the date on which the impugned order first came to its knowledge. Subsequent emails from Indian Overseas Bank and Yes Bank Limited dated 17.10.2025 and 03.11.2025 respectively informed the petitioner of further recovery communications dated 01.10.2025 and 09.10.2025.
The petitioner further submitted that the order-in-original had been passed in violation of Section 75(4) of the CGST/RGST Act, 2017 and principles of natural justice because no opportunity of personal hearing had been granted. It was also contended that the Appellate Authority rejected the appeal solely on limitation without adjudicating the matter on merits and without properly considering the date of communication.
The petitioner relied upon Division Bench decisions of the Rajasthan High Court in M/s M R Traders v. UOI, M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors., Man Singh Tanwar v. Commissioner, Central Goods and Services Tax Department & Ors., RPC PSIPL JV Vs. State of Rajasthan & Ors., and RPC PSIPL JV Vs. State of Rajasthan & Ors. The petitioner argued that sufficient cause had been shown and that the appeal should be considered on merits after condoning the delay.
The respondents opposed the writ petition, contending that the appellate order had rightly been passed and that the appeal was barred by limitation. The Court noted that the Appellate Authority is bound by the statutory limitation under Section 107 of the RGST/CGST Act, 2017. However, having regard to the reasons for the delay and the circumstances being beyond the petitioner’s control, the Court held that non-adjudication of the appeal on merits would cause grave injury and prejudice to the petitioner.
The Court noted that the judgments relied upon by the petitioner had directed delayed appeals to be entertained on merits. It also considered the Division Bench judgment of the Punjab and Haryana High Court in Luxmi Traders versus Union Territory of Chandigarh and Ors., which dealt with service of notices and orders through the GST common portal.
The Rajasthan High Court reproduced the conclusions in Luxmi Traders, including that service of a show cause notice could not be deemed sufficient merely because it was uploaded on the Common Portal unless receipt was acknowledged or a reply was filed; that ex parte proceedings in such circumstances could be restored to the stage of issuance of the show cause notice; that, where an order-in-original was passed after contest but served only by portal upload, the period of limitation for filing the appeal would not be triggered; and that appeals dismissed on limitation in such circumstances could be restored for decision on merits.
Being in respectful agreement with that view and following its own consistent approach, the Court allowed the writ petition to the extent of condoning the delay of 450 days, after granting relaxation of 120 days under Section 107 of the CGST Act. The Appellate Authority was directed to entertain and adjudicate the appeal on merits, provided the appeal was filed within 30 days of the order being uploaded on the website of the Court.
Cases Discussed
- M/s M R Traders v. UOI — 2026 SCC OnLine RAJ 2115.
- M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors. — 2024 SCC OnLine Raj 3938.
- Man Singh Tanwar v. Commissioner, Central Goods and Services Tax Department & Ors. — D.B. CWP 14658/2024.
- RPC PSIPL JV Vs. State of Rajasthan & Ors. — D.B. CWP 7260/2025.
- RPC PSIPL JV Vs. State of Rajasthan & Ors. — D.B. CWP 11794/2025.
- Luxmi Traders versus Union Territory of Chandigarh and Ors. — (2026:PHHC099329:DB) in CWP No. 27139/2025.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. Petitioner, inter alia, seeks quashing of the impugned appellate order dated 19.06.2026 passed by the learned Appellate Authority, State Tax, Alwar, whereby the appeal preferred against the order-in-original dated 18.03.2024 passed by the Assistant Commissioner, State Tax, Alwar, was rejected on the ground of limitation and further seeks a direction to Respondent No. 4 to remove the hold/lien marked on the petitioner’s bank accounts.
1.1 In the present case, there is delay of 450 days in filing the appeal against the Order-in-Original, whereby GST demand of Rs.16,11,302/- for Financial Year 2018-19 was raised on the account of wrongful availment of Input Tax Credit and excess outward tax in Form- GSTR-1 as compared to Form-GSTR-3B. The appeal against the said order was filed on 09.10.2025. However, the Appellate Authority vide impugned order dated 19.06.2026 dismissed the appeal on the ground of limitation as it does not have the power to condone the delay in filing the appeal. Aggrieved by the same petitioner filed this instant writ petition on 04.08.2026.
2. Learned counsel for the petitioner submits that the delay in filing the appeal occurred due to bona fide circumstances. The delay is thus occasioned by genuine and sufficient cause, and not due to any negligence or lack of diligence on the part of the petitioner.
2.1 It was further submitted that the petitioner remained unaware of the passing of the Order-in-Original dated 18.03.2024 as the same was uploaded on the GST portal under the head “Additional Notices and Orders” instead of “Notices and Orders”. The order was never served upon the petitioner manually or in hard copy. Thereafter, the respondent department initiated recovery proceedings on 19.04.2024 by issuing Form GST DRC-13 under Section 79(1)(c) of the CGST/RGST Act, 2017 to the petitioner’s banker, directing the Bank to remit alleged outstanding amount of Rs.16,09,249/- to the government. Consequently, the Bank marked a hold/lien on the petitioner’s bank account. The petitioner came to know about the recovery proceedings only on 07.10.2025, when he received a telephone call from an officer of the respondent department informing him that recovery proceedings had been initiated. Upon acquiring knowledge of the impugned order, the petitioner preferred a statutory appeal on 09.10.2025 wherein specifically mentioned 07.10.2025 being the date of communication on which the impugned order first came to his knowledge. Thereafter, post filing the appeal, the petitioner received an email dated 17.10.2025 from Indian Overseas Bank and a further email dated 03.11.2025 from Yes Bank Limited, whereby the petitioner came to know that the respondent department had initiated further recovery proceedings by issuing recovery communications dated 01.10.2025 and 09.10.2025 to the said banks.
2.2 Owing to these circumstances, the petitioner could not take necessary steps within the prescribed period. The delay was neither intentional nor due to any negligence. The Order-in-Original has been passed in complete violation of the mandatory provisions of Section 75(4) of the CGST/RGST Act, 2017 and the principles of natural justice, as no opportunity of personal hearing was ever granted to the petitioner. Further, the respondent no.3 rejected the appeal preferred by the petitioner solely on the ground that the same was barred by limitation, without adjudicating the matter on merits and overlooking the date of communication.
3. In the aforesaid backdrop, we have heard the learned counsels for the parties and perused the record.
4. Learned Counsel for the petitioner, relying on the various Division Bench judgments of this very Court in M/s M R Traders v. UOI1, M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors2, Man Singh Tanwar v. Commissioner, Central goods and Services Tax Department & Ors.3, RPC PSIPL JV Vs. State of Rajasthan & Ors4 and RPC PSIPL JV Vs. State of Rajasthan & Ors5 argues that sufficient cause of delay in filing the appeal due to circumstances beyond control has been shown and thus appeal be directed to be considered on merits after condoning the delay by this Court.
5. Learned counsels for the respondents oppose the above submission and contends that the impugned order has rightly been passed and appeal is now barred by limitation.
6. Having heard, as above, it transpires that while it is true that the Appellate Authority is bound by the statutory provisions of limitation provided under Section 107 of the RGST/CGST Act, 2017, however, considering the reasons owing to which the petitioner could not submit its appeal within the stipulated time, being beyond its control, non-adjudication of appeal on merits would cause grave injury and prejudice to the petitioner.
7. In the judgments cited above, this Court, while allowing the writ petitions, have issued directions to entertain the appeal on merits.
8. Aside above, our attention has been gone to a Division Bench Judgment rendered by Punjab and Haryana High Court in case titled as Luxmi Traders versus Union Territory of Chandigarh and Ors.6, wherein based on elaborate discussion and deliberations thereof, following view has been taken.
“60. On the basis of discussions and deliberations aforesaid, we come to the following conclusions:-
(i) Service of SCN upon the petitioner/assessee concerned cannot be deemed sufficient merely on account of its uploading on the Common Portal, unless its receipt is acknowledged or a reply is filed.
(ii) Where SCN is served only by way of uploading it on the Common Portal and in the absence of reply filed by the petitioner/assessee concerned, ex parte order is passed in orginal, the proceedings would stand restored to the stage of issuance of SCN and the petitioner would be at liberty to file reply to the SCN within a pe- riod of four weeks from today whereafter, the Department shall proceed further after affording required opportunity of hearing.
(iii) In cases where the order-in-original is passed after contest, and is served only by uploading it on the Common Portal, the pe- riod of limitation for filing of appeal would not be triggered, and the assessee aggrieved will have the right to file an appeal within a pe- riod of four weeks from today.
(iv) Where appeals filed against the order-in-original, which was served only by uploading it on the Common Portal are dismissed on the ground of limitation, the order of the Appellate Court shall be set aside and the appeal would stand restored to its original number, and would be heard and decided on merits.
(v) In cases where SCNs were served only on portal and ex parte ad- judication order was passed for want of reply of assessee and ap- peal against the said order was dismissed on the ground of delay, both adjudication order and order-in-appeal shall be set aside and pro- ceedings will be restored at the stage of issuance of SCN and petitioner/assessee shall be at liberty to file reply to SCN within four weeks from today, whereafter, the department shall proceed further af- ter affording due opportunity of hearing.”
9. Having given out thoughtful consideration to the aforesaid view expressed by the Punjab and Haryana High Court, we are in respectful agreement therewith and accordingly, see no reason why the benefit be not accorded to the petitioner therein.
10. In the premise, following the consistent view as already taken by this Court, ibid, we allow the present writ petition to the extent of condoning the delay of 450 days (after granting relaxation of 120 days under Section 107 of CGST Act) in filing of the appeal by the petitioner.
11. Accordingly, the Appellate Authority shall now entertain the appeal of the petitioner and adjudicate the same on merits, provided the same is filed within 30 days of the instant order being uploaded on the website of this Court.
12. Stay petition and all pending application also stand disposed of.
Notes:
1 2026 SCC OnLine RAJ 2115
2 2024 SCC OnLine Raj 3938
3 D.B. CWP 14658/2024
4 D.B. CWP 7260/2025
5 D.B. CWP 11794/2025
6 (2026:PHHC099329:DB) in CWP No. 27139/2025.
