A bare perusal of the provisions of Section 107 of the CGST Act, reveals that an assessee aggrieved by an order passed by the Adjudicating Authority may appeal to the Appellate Authority within three months from the date on which the said decision or order is communicated to such person. Sub-Section (4) of Section 107 of the CGST Act provides discretion to the Appellate Authority to entertain an appeal if it is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the prescribed three-month period, provided the appeal is presented within an additional period of one month.
At present Appellate Authority is dismissing the appeal filed by the assessee under GST on the ground that the same was time barred being filed beyond the period of four months as prescribed under Section 107 of the CGST Act, 2017. The Adjudicating Authority is taking the shelter of citations of Hon’ble Supreme Court in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur and Others reported in (2008) 3 SCC 70, Garg Enterprises v. State of UP (2024) SCC online all 2583 (Writ Petition No. 291 of 2022 and Judgment Dated 19.01.2024, Commissioner of Customs and Central Excise v. Hongo India Private Limited and Another (2009) 5 SCC 791 and Asst. Commr. (CT), LTU, Kakinada v. Glazo Smith Kline Consumer Health Care Ltd. (2020) 3 SCC 70.
Moreover, where the assessee is challenging the such order of the Appellate Authority before the Hon’ble High Court under their jurisdiction, the Hon’ble High Court is taking the plea that the Court under the extraordinary jurisdiction cannot interfere with the Appellate Authority’s order as the application of Limitation Act, 1963 does not apply to Section 107 of the CGST Act, 2017. On the basis of aforesaid judgments, the Hon’ble Court(s) are dismissing the petition of the taxpayers.
Recently, in the matter of Addichem Speciality LLP Vs. Special Commissioner I, Department of Trade and Taxes and Ors. in W.P. (C) 14279/2024 (Judgment pronounced on 07.02.2025), the Hon’ble Delhi High Court (in batch of petitions) has to consider and decided, the following two main issues –
i. Whether the Appellate Authority under Section 107(4) of the CGST Act is authorized to condone the delay in filing an appeal beyond one month after the expiration of the three-month period specified in Subsection (1) of Section 107 for filing an appeal against a decision or order issued by an adjudicating authority under the CGST Act? and
ii. Whether the appellate authority is empowered to condone a delay beyond the thirty-day period prescribed under Subsection (4) of Section 107 of the Act of 2017 or not, this Court, in exercising its extraordinary jurisdiction under Article 226 of the Constitution of India, may direct the condonation of such delay. This can be done if the Court is satisfied that an exceptional case has been made out for such condonation or if the interest of justice demands it.
The Hon’ble High Court of Delhi has held that it is well settled that once a statute prescribes a specific period of limitation, the Appellate Authority does not inherently hold any power to condone the delay in filing the appeal by invoking the provisions of Section 5 or 29 of the Limitation Act, 1963. (Para 60). The Hon’ble High Court of Delhi has quoted the specific para of the Sing Enterprise (Supra) as under-
“8. The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of statute are not vested with jurisdiction to condone the delay beyond the permissible period provided under the statute. The period up to which the prayer for condonation can be accepted is statutorily provided. It was submitted that the logic of Section 5 of the Limitation Act, 1963 (in short “the Limitation Act”) can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow it to be presented within a further period of 30 days. In other words, this clearly shows that the appeal has to be filed within 60 days but in terms of the proviso further 30 days’ time can be granted by the appellate authority to entertain the appeal. The proviso to subsection (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only up to 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days’ period.”
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Similarly, in the decision of Garg Enterprises (supra) it was observed as under:
“7. The Central Goods and Services Act is a special statute and a self-contained code by itself. Section 107 of the Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite law that Section 5 of the Limitation Act, 1963 will apply only if it is extended to the special statute. Section 107 of the Act specifically provides for the limitation and in the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. Accordingly, one cannot apply Section 5 of the Limitation Act, 1963 to the aforesaid provision. 8. In light of the above, no interference is required in this petition and the same is, accordingly, dismissed.”
{Bold portion emphasized}
Reliance can also be placed on a decision of the Supreme Court in the case of Hongo India Private Ltd. (Supra). This matter pertained to the unamended Section 36H (1) of the Central Excise Act, which provided for a reference to the High Court. The provision enabled the Commissioner of Central Excise or any other party to direct the Tribunal, within a period of 180 days from the date of service of notice of an order under Section 35C of the Central Excise Act, to refer to the High Court any question of law arising from such order of the Tribunal. The said provision neither extended the period of limitation for filing an application to the High Court beyond the prescribed period nor did it permit the condonation of the delay. In this context, it was held as follows:
“19. The said decision in Popular Construction Co. case [(2001) 8 SCC 470] arose under the Arbitration and Conciliation Act, 1996. The question which arose for consideration in that case was whether provisions of Section 5 of the Limitation Act, 1963 are applicable to an application challenging an award under Section 34 of the Arbitration and Conciliation Act, 1996. In that case, award was filed by the appellant Union of India in the Bombay High Court on 29-3-1999. The appellant filed an application challenging the award on 19-4-1999 under Section 30 read with Section 16 of the Arbitration Act, 1940. Subsequently, the application was amended by inserting the words “Arbitration and Conciliation Act, 1996” in place of “Arbitration Act, 1940”. The application was dismissed by the learned Single Judge on 26-10-1999 on the ground that it was barred by limitation under Section 34 of the 1996 Act. The Division Bench rejected the appeal and upheld the findings of the learned Single Judge. The said order was challenged in this Court.
20. Though learned counsel for the appellant relied on the said decision in support of his claim, on perusal of the same, we are unable to concur with him. In para 12, this Court held that: (Popular Construction Co. case [(2001) 8 SCC 470], SCC pp. 474-75)
“12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words used in the proviso to sub-section (3) are ‘but not thereafter’ and this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase ‘but not thereafter’ wholly otiose. No principle of interpretation would justify such a result.”
Ultimately, this Court dismissed the appeal filed by the Union of India and confirmed the order of the High Court holding that the application filed to set aside the award is barred by limitation.
It would also be pertinent to notice the decision of the Supreme Court in the case of Asst. Commr. (CT), LTU, Kakinada (supra), wherein it was observed as under:
“12. Indubitably, the powers of the High Court under Article 226 of the Constitution are wide, but certainly not wider than the plenary powers bestowed on this Court under Article 142 of the Constitution. Article 142 is a conglomeration and repository of the entire judicial powers under the Constitution, to do complete justice to the parties. Even while exercising that power, this Court is required to bear in mind the legislative intent and not to render the statutory provision otiose. In a recent decision of a three- Judge Bench of this Court in Oil and Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Limited & Ors. [2@O0L7) 5 SCC 42], the statutory appeal filed before this Court was barred by 71 days and the maximum time limit for condoning the delay in terms of Section 125 of the Electricity Act, 2003 was only 60 days. In other words, the appeal was presented beyond the condonable period of 60 days. As a result, this Court could not have condoned the delay of 71 days. Notably, while admitting the appeal, the Court had condoned the delay in filing the appeal. However, at the final hearing of the appeal, an objection regarding appeal being barred by limitation was allowed to be raised being a jurisdictional issue and while dealing with the said objection, the Court referred to the decisions in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur & Ors. [(2008) 3 SCC 70 = 2008 (221) E.L.T. 163 (S.C.)], Commissioner of Customs and Central Excise v. Hongo India Private Limited & Anr. [(2009) 5 SCC 791 = 2009 (236) E.L.T. 417 (S.C.)], Chhattisgarh State Electricity Board v. Central Electricity Regulatory Commission & Ors. [(2010) 5 SCC 23] and Suryachakra Power Corporation Limited v. Electricity Department represented by its Superintending Engineer, Port Blair & Ors. [(2016) 16 SCC 152] and concluded that Section 5 of the Limitation Act, 1963 cannot be invoked by the Court for maintaining an appeal beyond maximum prescribed period in Section 125 of the Electricity Act.
x x x x x
19. Arguendo, reverting to the factual matrix of the present case, it is noticed that the respondent had asserted that it was not aware about the passing of assessment order dated 21-6-2017 although it is admitted that the same was served on the authorised representative of the respondent on 22-6-2017. The date on which the respondent became aware about the order is not expressly stated either in the application for condonation of delay filed before the appellate authority, the affidavit filed in support of the said application or for that matter, in the memo of writ petition. On the other hand, it is seen that the amount equivalent to 12.5% of the tax amount came to be deposited on 12-9-2017 for and on behalf of respondent, without filing an appeal and without any demur – after the expiry of statutory period of maximum 60 days, prescribed under Section 31 of the 2005 Act. Not only that, the respondent filed a formal application under Rule 60 of the 2005 Rules on 8-5-2018 and pursued the same in appeal, which was rejected on 17-8-2018. Furthermore, the appeal in question ne assessment order came to be filed only on 24-9-2018 without disclosing the date on which the respondent in fact became aware about the existence of the assessment order dated 21-6-2017. On the other hand, in the affidavit of Mr. Sreedhar Routh, Site Director of the respondent-company (filed in support of the application for condonation of delay before the appellate authority), it is stated that the company became aware about the irregularities committed by its erring official (Mr. P. Sriram Murthy) in the month of July, 2018, which pre-supposes that the respondent must have become aware about the assessment order, at least in July, 2018. In the same affidavit, it is asserted that the respondent-company was not aware about the assessment order, as it was not brought to its notice by the employee concerned due to his negligence. The respondent in the writ petition has averred that the appeal was rejected by the appellate authority on the ground that it had no power to condone the delay beyond 30 days, when in fact, the order examines the cause set out by the respondent and concludes that the same was unsubstantiated by the respondent. That finding has not been examined by the High Court in the impugned judgment and order at all, but the High Court was more impressed by the fact that the respondent was in a position to offer some explanation about the discrepancies in respect of the volume of turnover and that the respondent had already deposited 12.5% of the additional amount in terms of the previous order passed by it. That reason can have no bearing on the justification for non-filing of the appeal within the statutory period. Notably, the respondent had relied on the affidavit of the Site Director and no affidavit of the concerned employee (P. Sriram Murthy, Deputy Manager-Finance) or at least the other employee [Siddhant Belgaonker, Senior Manager (Finance)], who was associated with the erring employee during the relevant period, has been filed in support of the stand taken in the application for condonation of delay. Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non-compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24-9-2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all.
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21. Taking any view of the matter, therefore, the High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold.”
{Bold portion emphasized}
The Hon’ble High Court of Delhi has held that a careful reading of the aforesaid decision would bring to the fore that the legislative intention to provide a specific period of limitation, thereby excluding the general applicability of the Limitation Act, 1963, must be respected. The Supreme Court has observed that the plenary powers of the High Court cannot in any case exceed the jurisdictional powers under Article 142 of the Constitution of India, 1950, and even the Supreme Court cannot extend the period of limitation de hors the provisions contained in any statutory enactment. (Para 64).
The Hon’ble High Court of Delhi has held that section 107(4) firstly prescribes a general time frame within which an appeal may be preferred. Once that period has elapsed, it stipulates that the appeal may be instituted within a further period of one month. The provision thus prescribes an additional period of one month within which an appeal may be instituted. That section however stops at that and does not allude to aspects such as sufficient cause or other similar factors which may have prevailed and led to the appeal not being lodged within the time prescribed. The provision thus clearly excludes the general principles which the law recognises as relevant for the purposes of condonation of delay. It is this facet of Section 107(4) which appears to have weighed upon various High Courts to hold that the said provision excludes the principles underlying Section 5 and other provisions concerned with condonation contained in the Limitation Act. It is this facet which triggers Section 29 of the Limitation Act and results in the exclusion of the other provisions governing condonation contained in that statute. (Para 65).
The Hon’ble High Court of Delhi has held that at this juncture, it would be expedient to refer to few judgments of the other High Courts on the subject. Reference can be invited to the decision of the Chhattisgarh High Court in Nandan Steels & Power Ltd. v. State of Chhattisgarh 2022 SCC online Chh 1428, wherein it was held that the statutory timeline for filing an appeal under Section 107(1) of the CGST Act is three months from the date the decision or order is communicated to the appellant. However, Section 107(4) provides a limited extension of one additional month, at the discretion of the appellate authority, if sufficient cause is demonstrated. The Court observed that the Legislature, while allowing an extension in specific instances, did not intend for the Limitation Act to apply to proceedings under the CGST Act. If such an intention existed, there would have been no need to confer special powers on the High Court to entertain appeals beyond the prescribed period, subject to sufficient cause being shown. This distinction is crucial because, unlike other legislations where Section 5 of the Limitation Act applies automatically via Section 29(2), the CGST Act prescribes a rigid timeframe. Further, the absence of the phrase “but not thereafter” in Section 107(4) does not dilute its mandatory nature. (Para 66).
Likewise, the Allahabad High Court in M/s. Yadav Scrap Traders vs. Additional Commissioner, WRIT TAX No. – 977 of 2023, Dated; 15.02.2024, dealt with a matter wherein the appeal was filed 66 days after the expiry of the additional one-month period, making it ineligible for condonation, decision of the Appellate Authority that refused to entertain it in view of section 107(4) was upheld. Emphasizing the significance of the statutory limitations in tax laws, particularly in the context of the CGST Act, it was also pointed out that limitation provisions are crucial in ensuring the timely resolution of disputes, promoting legal certainty, and facilitating efficient tax compliance. It was held that given the complexity of tax laws and the potential for disputes between taxpayers and authorities, such provisions establish a structured framework that prevents undue delays and ensures fiscal stability. It was thus observed that Section 107 of the CGST Act, being a self-contained provision, prescribes a specific limitation period for filing appeals, reflecting the legislative intent to expedite dispute resolution and by setting strict time limits, the provision ensures that tax-related matters are adjudicated without unnecessary delays, thereby enhancing administrative efficiency and revenue certainty. It was held that Section 5 of the Limitation Act generally allows for extensions in exceptional cases but its application is expressly excluded in taxation statutes where specific timeframes are prescribed. (Para 67).
Nonetheless it is to be noted other side a different judgment of the Hon’ble Calcutta High Court dated 04.01.2024 in the matter of Arvind Gupta Vs Assistant Commissioner of Revenue State Taxes, Cooch Behar Charge & Ors, WPA/2904/2023, wherein recent judgment of the Hon’ble Division Bench of Calcutta High Court dated 01.12.2023 in the matter of S.K. Chakraborty & Sons versus Union of India & others M.A.T. Nos. 81-82 of 2022, was cited and mentioned that the Appellate Authority lacks power to condone the delay cannot be sustained in view of the judgment passed by the Hon’ble Division Bench of Calcutta High Court in the matter of S.K. Chakraborty & Sons (Supra). The Hon’ble Division Bench of Calcutta High Court in S.K. Chakraborty & Sons (supra) held thus:
“16. The Co-ordinate Bench in Kajal Dutta (supra) has construed the provisions of Section 107 (1) and (4) of the Act of 2017 and held that, the statute does not state that beyond the prescribed period of limitation the appellate authority cannot exercise jurisdiction.
17. It is in the interest of the nation that litigations come to an end as expeditiously as possible. To achieve such purpose, legislature has enacted the Act of 1963 and prescribed various period of limitation beyond which, the right to approach an authority for redressal of the grievances remain suspended. Apart from the general law of Limitation as prescribed in the Act of 1963, special statutes prescribe period of limitation for specific scenarios and mandates completion of proceedings within the time period specified.
Prescription of a period of limitation by a special statute may or may not exclude the applicability of the Act of 1963. In the context of the issue that has fallen for consideration herein the provision of the Act of 1963 particularly Section 29 (2) thereof should be considered.
18. Section 29 (2) of the Act of 1963, has provided for situations where special or local law prescribes a period of limitation different from the period prescribed by the Act of 1963. It has provided that the provisions of Section 3 shall apply as if such period were the period prescribed by the schedule to the Act of 1963, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 both inclusive shall apply only insofar as and to the extent to which they are not expressly excluded by the special or the local law.
19. Section 107 of the Act of 2017 does not exclude the applicability of the Act of 1963 expressly. It does not exclude the applicability of the Act of 1963 impliedly also if one has to consider the provisions of Section 108 of the Act of 2017 which provides for a power of revision to the designated authority, against an order of adjudication. In case of revision a far more enlarged period of time for the Revisional Authority to intervene has been prescribed. Two periods of limitations have been prescribed for two different authorities namely, the Appellate Authority and the Revisional Authority in respect of the same order of adjudication. Any interference with the order of adjudication either by the Appellate Authority or by the Revisional Authority would have an effect on the defaulter/noticee. Section 107 does not have a non-obstante clause rendering Section 29(2) of the Act of 1963 non applicable. In absence of specific exclusion of the Section 5 of the Act of 1963 it would be improper to read an implied exclusion thereof. Moreover, Section 107 in its entirety has not expressly stated that, Section 5 of the Act of 1963 stands excluded.
20. Therefore, in our view, since provisions of Section 5 of the Act of 1963 have not been expressly or impliedly excluded by Section 107 of the Act of 2017 by virtue of Section 29 (2) of the Act of 1963, Section 5 of the Act of 1963 stands attracted. The prescribed period of 30 days from the date of communication of the adjudication order and the discretionary period of 30 days thereafter, aggregating to 60 days is not final and that, in given facts and circumstances of a case, the period for filling the appeal can be extended by the Appellate Authority.
21. The issue that has been framed is answered in the affirmative, in favour of the appellant and against the revenue.”
In the aforesaid matter, the Hon’ble Division Bench of Calcutta High Court held that Section 107 of the CGST Act, 2017 does not exclude the applicability of the Limitation Act of 1963 expressly. The Hon’ble Division Bench of Calcutta High Court further observed that since the provisions of Section 5 of the Limitation Act of 1963 have not been expressly or impliedly excluded by Section 107 of the CGST Act, 2017 by virtue of Section 29(2) of the Limitation Act of 1963, Section 5 of the Limitation Act of 1963 stands attracted. It follows therefrom that the Appellate Authority is left with the discretion to allow an appeal to be presented within a period of one month after expiry of the period of limitation stipulated from the date of communication of the order upon sufficient cause being shown. Since the applicability of the 1963 Act has not been expressly or impliedly excluded, the Appellate Authority has the power to condone delay in preferring the appeal beyond the limitation specified in Section 107 of the said Act in view of the decision in S.K. Chakraborty (supra).
Moreover, the Hon’ble Delhi High Court held that being the legal position, we unhesitatingly find that the decision of the Calcutta High Court in the case of Mukul Islam v. Assistant Commissioner of Revenue 24 SCC online Cal 8544, wherein the Court overturned the order that had rejected the appeal holding that the CGST law does not explicitly exclude the Limitation Act as also the decision of the Andhra Pradesh High Court in Venkateshwara Rao Kesanakurti v. State of AP, 2024 SCC online AP 3905, wherein it was held that Limitation Act is applicable to condone the delay in filing the appeal beyond one month under the CGST Act, cannot be of any assistance to the petitioners. (Para 68).
The Hon’ble Delhi High Court concluded that in summary, the power to condone delay caused in pursuing a statutory remedy would always be dependent upon the statutory provision that governs. The right to seek condonation of delay and invoke the discretionary power inhering in an appellate authority would depend upon whether the statute creates a special and independent regime with respect to limitation or leaves an avenue open for the appellant to invoke the general provisions of the Limitation Act to seek condonation of delay. The facility to seek condonation can be resorted provided the legislation does not construct an independent regime with respect to an appeal being preferred. Once it is found that the legislation incorporates a provision which creates a special period of limitation and proscribes the same being entertained after a terminal date, the general provisions of the Limitation Act would cease to apply. (Para 69).
It is also to be noted that Hon’ble Supreme Court explained principles for delay condonation in the matter PATHAPATI SUBBA REDDY vs. THE SPECIAL DEPUTY COLLECTOR (LA) in SPECIAL LEAVE PETITION (CIVIL) NO. 31248 OF 2018, Dated 08th April, 2024, and laid down eight principles by providing harmonious construction to Sections 3 and 5 of the Limitation Act, 1963 as under-
i. Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself;
ii. A right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time;
iii,. The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally;
iv. In order to advance substantial justice, though liberal approach, justice-oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act;
v. Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence;
vi. Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal;
vii. Merits of the case are not required to be considered in condoning the delay; and
viii. Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision.
Conclusion: The right to seek condonation of delay and invoke the discretionary power inhering in an appellate authority would depend upon whether the statute creates a special and independent regime with respect to limitation or leaves an avenue open for the appellant to invoke the general provisions of the Limitation Act to seek condonation of delay. The facility to seek condonation can be resorted provided the legislation does not construct an independent regime with respect to an appeal being preferred. Once it is found that the legislation incorporates a provision which creates a special period of limitation and proscribes the same being entertained after a terminal date, the general provisions of the Limitation Act would cease to apply.
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