'Lame Excuses': Gujarat High Court Upholds GST Authority's Rejection Of Appeal Filed Beyond Limitation

The Gujarat High Court on Thursday (November 27) upheld order of the appellate authority under the GST Act which had dismissed a partnership firm's appeal on the ground that it was filed beyond the limitation period prescribed under the statute. 

The court held that the Act prescribes a maximum limitation period of 120 days which can be condoned by the appellate authority in entertaining the appeal. It further said that it was not inclined to quash the order as the petitioner had given "lame excuses" seeking condonation of delay such as illness of accountant and closure of business. 

A show cause notice dated 27-12-2023 under Section 23 of the GST Act was issued for financial year 2018-2019 by the respondents calling upon the explanation from petitioner firm for not declaring correct tax liability while filing annual returns of GSTR-09.

The petitioner submitted a reply on 10-2-2024 to respondent 3 the State Tax Officer. Thereafter the Officer passed an order dated 28-2-2024 under Section 73 of the GST Act. Being aggrieved the petitioner filed statutory appeal on 13-08-2024 belatedly i.e., beyond the limitation. The petitioner prayed for condoning the delay, however the respondent 2-Appellate Authority in its order rejected the appeal on the ground that appeal was filed with delay of more than 2 months and 16 days. 

Before the high court the petitioner sought a prayer to condone the delay caused in filing the statutory appeal before the appellate authority and to further direct the authority to hear the appeal on merits.

A division bench of Justice AS Supehia and Justice Pranav Trivedi while dictating its order noted that the filing of appeal under Section 107 GST Act beyond limitation period of 2 months and 16 days is not in dispute.

Referring to Section 107 of the GST Act on filing of appeal the court said:

"Thus the maximum period for presenting the appeal against the order...was three months and thereafter if the appellate authority is of the opinion that appellant was prevented by sufficient cause in presenting the appeal the same can be allowed to be presented within further period of one month. Thus the maximum period would be 120 days i.e. one month is only allowed if appellate authority is satisfied that the appellant was prevented by sufficient cause from presenting appeal within period of 3 months. Thus at the first instance the petitioner was required to file the appeal within 3 months and only if the appellate authority got satisfied the cause shown by the petitioner for non-filing of appeal within 3 months, the appellate authority has the power to give one month more to present the same. The present case, the petitioner has filed an appeal after period of 2 months and 16 days over and above the period of 3 months".

The bench said that even if the appellate authority in its discretion had accepted the cause shown by the petitioner for belatedly filing the appeal, the appellate authority had the power to condone delay of 1 month and allow such appeal filed within limitation period of one month only.

"Thus appellate authority has held that it does not have the power to condone the delay beyond the period of 120 days," it added. However the court was considering whether it can set aside the order of the appellate authority and direct it to accept the appeal beyond the condonation period or not.

After referring to Supreme Court judgments on the issue, the court said:

"Thus the Supreme Court has held that even if a writ petition is filed after the expiry of maximum period of limitation though alternative remedy is available, the high court cannot disregard the statutory period of limitation in entertaining writ petition of such a party as a matter of course, and doing so would be in the teeth of underlying dictum of three judge bench of Supreme Court in case of ONGC. The Supreme Court has further cautioned that though the high court has wide powers the same does not mean that it would issue a writ which maybe inconsistent with legislative intent regarding dispensation explicitly prescribed under Section 31 of the 2005 Act and if the same is done that would render the legislative scheme otiose. Thus on the same principles as enunciated by Supreme Court we are not inclined to set aside the order passed by the appellate authority more particularly in wake of the fact that the lame excuses has been given by petitioner for condoning delay such as illness of accountant and closure of business". 

The court further referred to Supreme Court's decision in Singh Enterprises and stated that the Apex Court had on the same line has refused to accept reason of belated filing of appeal on the pretext of lack of experience and closure of business. 

The petitioner's counsel placed reliance on a 2023 judgment of Calcutta High Court in S.K. Chakraborty & sons vs. Union of India and others and submitted that period of filing appeal can be extended by appellate authority and appeal cannot be rejected on the basis that the appellate authority does not possess power to condone delay beyond 60 days. It is submitted that Calcutta High Court had invoked provisions of Limitation Act for holding that appellate authority has discretion to condone the delay. However it was fairly admitted that in the SLP Civil (Diary) 2024 filed by Revenue the said judgment has been stayed on 30-8-2024. 

It was urged that the appellate court's order be set aside since the appellate authority has not appreciated the reason of filing appeal with delay which was due to ill health of the accountant. It was further submitted that due to closure of business of the firm, all partners had lost touch and they were unable to file appeal within limitation period and time was consumed in gathering the necessary funds. 

The Government counsel pointed out the judgment of Supreme Court in Assistant Commissioner (CT) LTU, Kakinada & Ors. v/s  M/s. Glaxo Smith Kline Consumer Health Care Limited (2020) had submitted that the delay may not be condoned. 

It was submitted that the Supreme Court had held that provisions of Section 5 of the Limitation Act cannot be invoked for maintaining an appeal prescribed in the statute. Reliance was also placed on decision of Supreme Court in M/s Singh Enterprises v/s Commissioner of Central Excise Jamshedpur and Ors (2008) and submitted that the ground raised in appeal on closure of business is also not palatable and thats why the appellate authority had rejected the appeal. 

The court dismissed the plea. 

Case title: M/S TAPI READY PLAST v/s STATE OF GUJARAT & ORS.

 R/SCA/12047/2025 

Citation : 2025 LiveLaw (Guj) 199