S.107 CGST Act Prescribes Independent Regime Of Limitation For Filing Appeals, Application Of S.5 Limitation Act Stands Excluded: Delhi HC

The Delhi High Court has held that since Section 107 of the Central Goods and Services Tax Act, 2017 prescribes an “independent regime” to determine the limitation period for filing statutory appeals, the provision for condonation of delay under Section 5 of the Limitation Act stands excluded.A division bench of Justices Yashwant Varma and Dharmesh Sharma observed, “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.”Section 107 stipulates that an assessee aggrieved by an order passed by the Adjudicating Authority may appeal to the Appellate Authority within three months. Section 107(4) 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.Thus, the provision in toto prescribes a 4-month period to prefer an appeal.In the case at hand, the Petitioners were aggrieved by the cancellation of their GST registrations and the demands imposed. However, their appeals were dismissed by the Appellate Authority as being time-barred. Thus, the question before the High Court was 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 Section 107(1).Answering in the negative, the High Court observed 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 by invoking the provisions of the Limitation Act, 1963.It observed, “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.”Court added that the legislative intention to provide a specific period of limitation, thereby excluding the general applicability of the Limitation Act, must be respected. Reliance was placed on Garg Enterprises v. State of UP (2024) where the Allahabad HIgh Court held, “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.”The Court also agreed with the Chhattisgarh High Court's decision in Nandan Steels Power Ltd. v. State of Chhattisgarh (2022) wherein it was held that the Legislature 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.The Court then expressed disagreement with Mukul Islam v. Assistant Commissioner of Revenue (2024) wherein the Calcutta High Court Court the order that had rejected the appeal holding that the CGST law does not explicitly exclude the Limitation Act.It also disagreed with Venkateshwara Rao Kesanakurti v. State of AP (2024) wherein the Andhra Pradesh High Court held that Limitation Act is applicable to condone the delay in filing the appeal beyond one month under the CGST Act.As such, the petitions were dismissed.Case title: M/S Addichem Speciallity LLP v. Special Commissioner I, Department Of Trade And Taxes And Anr and batchCitation: 2025 LiveLaw (Del) 160Case no.: W.P.(C) 14279/2024Click here to read order

S.107 CGST Act Prescribes Independent Regime Of Limitation For Filing Appeals, Application Of S.5 Limitation Act Stands Excluded: Delhi HC

Kapil Dhyani

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