Telangana HC Allows GST Appeal Despite Delay Due to Writ Pendency

S. Malla Reddy and Company Vs Deputy Commissioner – 2 (State Taxes) (Telangana High Court)

In a significant relief to taxpayers, the Telangana High Court in M/s. S. Malla Reddy and Company vs. Deputy Commissioner (State Taxes) (W.P. No. 10317 of 2026, dated 08.04.2026) has permitted filing of a delayed appeal even after rejection of a rectification application, emphasizing the importance of substantive justice over procedural technicalities.

Facts of the Case

The petitioner challenged:

• Order dated 07.11.2025 passed under Section 73 of the CGST/SGST Act, 2017
• Corresponding Form GST DRC-07 dated 07.11.2025
• Rectification rejection order dated 12.01.2026

Instead of directly filing an appeal, the petitioner had initially pursued a rectification application, which was subsequently rejected by the department.

Issue Before the Court

Whether the petitioner, after pursuing a rectification remedy and facing delay, can still be permitted to file an appeal against the original order.

Contentions

• The Department contended that the petitioner had an effective alternative remedy by way of appeal.
• The Petitioner sought liberty to file an appeal, highlighting that:
  • Delay occurred due to pursuing rectification
  • The delay should be condoned on equitable grounds

Observations of the High Court

The Hon’ble Court took a practical view and observed:

• The rectification rejection order did not alter the original order
• Therefore, the appropriate remedy remained an appeal against the Order-in-Original
• The petitioner had been bonafide pursuing a remedy before the Court, which deserves consideration

Directions Issued

The High Court:

• Granted liberty to the petitioner to file an appeal within two weeks
• Directed that such appeal be accompanied by:
  • Statutory pre-deposit
  • Application for condonation of delay
• Directed the appellate authority to:
  • Consider delay sympathetically
  • Take into account that the petitioner was pursuing writ proceedings

The Court clarified that:

If the delay is satisfactorily explained, the appeal should be decided on merits.

Key Takeaways

1. Rectification is not a substitute for appeal

Filing a rectification application does not extend or replace the statutory appeal remedy.

2. Delay can be condoned in genuine cases

Courts recognize situations where taxpayers pursue alternate remedies in good faith.

3. Writ proceedings may justify delay

Time spent before the High Court can be considered while condoning delay.

4. Substantive justice prevails

The ruling reinforces that procedural lapses should not deny a taxpayer the right to appeal.

Practical Implications for Taxpayers

• Always evaluate whether appeal should be filed alongside or instead of rectification
• In case of delay:
  • Maintain proper documentation of steps taken
  • Clearly justify the delay in the condonation application
• Courts may grant relief where there is bonafide conduct and absence of negligence

Conclusion

This judgment reiterates a consistent judicial approach that technicalities should not defeat the right to legal remedy. By allowing a delayed appeal even after rectification proceedings, the Telangana High Court has provided much-needed clarity and relief to taxpayers navigating procedural complexities under GST law.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

Sri K.P. Amarnath Reddy, learned counsel appears for petitioner.

Sri Swaroop Oorilla, learned Special Government Pleader for State Tax appears for respondents.

2. The instant Writ Petition has been preferred against the order dated 07.11.2025 passed under Section 73 of the Central Goods and Services Tax Act, 2017/State Goods and Services Tax Act, 2017 (for short ‘the Act’), along with the proceedings in FORM GST DRC-07 dated 07.11.2025 and the rectification rejection order dated 12.01.2026 passed by respondent No.1.

3. Learned counsel for the State Tax submits that the proper remedy for the petitioner is to prefer an appeal.

4. However, after some arguments, learned counsel for the petitioner seeks liberty to the petitioner to prefer an appeal against the impugned order. He submits that some delay might have been occurred in approaching the appellate authority and therefore, he may be directed to consider it sympathetically.

5. Upon hearing the learned counsel for the parties and having regard to the aforesaid facts and circumstances, we are of the view that since the impugned rectification rejection order did not vary the impugned order, the petitioner may prefer an appeal against the impugned Order-in-Original within a period of two weeks with statutory pre-deposit along with a delay condonation application. Thereupon, the learned appellate authority would consider the same in accordance with law taking into consideration that the petitioner has been pursuing the writ remedy before this Court in the meantime as well. The petitioner will be at liberty to take all the grounds in law and on facts before the appellate authority. If the appellate authority is satisfied that the delay is properly explained, he would proceed to consider the appeal on merits. Let it be made clear that we have not gone into the merits of the case of the parties.

The instant Writ Petition is disposed of with the aforesaid liberty. There shall be no order as to costs.

Miscellaneous applications, if any pending, shall stand closed.