High Court Quashes CGST Appellate Order Dismissing Appeal Solely on Limitation, Holds Writ Powers Under Article 226 Transcend Statutory Time Bar: Rajasthan High Court - 2025-04-26

Rajasthan High Court Allows Writ Petition Against Time-Barred GST Appeal Dismissal

Jodhpur: In a significant ruling concerning the Goods and Services Tax (GST) regime, the Rajasthan High Court has held that its extraordinary writ jurisdiction under Article 226 of the Constitution of India can be invoked to quash an order from the GST appellate authority that dismisses an appeal solely on the grounds of being time-barred under Section 107 of the Central Goods and Service Tax (CGST) Act, 2017.

The division bench of the High Court allowed a writ petition challenging an order dated June 11, 2024, passed by the Joint Commissioner of CGST and Central Excise, Jodhpur. The Joint Commissioner had dismissed an appeal (Order-in-Appeal No. 425) filed by an assessee, finding it was filed beyond the maximum permissible period prescribed under Section 107 of the CGST Act, which provides for an initial period of three months extendable by a further one month.

Background: Dismissal on Limitation

The Joint Commissioner's order was based on the interpretation that Section 107 of the CGST Act constitutes a self-contained code regarding appeals and implicitly excludes the application of Section 5 of the Limitation Act, 1963. Relying on precedents, including a Kerala High Court decision in Plenuel Nexus Private Ltd. v. Additional Commissioner Headquarter , the Joint Commissioner concluded that the appellate authority lacks the power to condone delay beyond the statutory period of 3 months plus 1 month. Consequently, the appeal was dismissed on limitation without considering the merits of the case.

The Joint Commissioner's order stated: "In view of the above it is clear that the appellate authority has no power to allow an appeal which is filed beyond the prescribed limit. Accordingly, I hold that, since the appeal is filed after expiry of the prescribed period of three months and a further period of one month... the appeal deserves to be rejected on the grounds of limitation without going into the merits of the case."

High Court's Analysis: Writ Powers vs. Statutory Limits

The assessee then approached the High Court via a writ petition. The Revenue argued that the writ petition was not maintainable given the express bar of limitation under Section 107, citing a previous decision of the same court in Ashok Varandan v. Central Board of Indirect Taxes and Customs & Ors.

However, the High Court took a different view. It observed that the CGST Act, while a fiscal statute, also aims to facilitate commercial and business activities, as reflected in provisions like Section 30. The court emphasized that a statutory right to appeal should ideally be decided on merits and not frustrated by "mere technicalities," even if there were some laches on the part of the assessee.

Crucially, the Court distinguished the powers of a statutory authority from its own powers under Article 226. The bench held: "It is by now too well-settled that the statutory provisions of limitation under Section 107 of the CGST Act would bind the statutory authority which cannot condone the delay except the circumstances envisaged thereunder but such limitations are not applied in a writ proceeding."

The Court highlighted that powers under Article 226 are "founded on justice, equity and good conscience and are exercised for public good." It further noted that the precedent cited by the Revenue ( Ashok Varandan ) primarily dealt with filing statutory returns (GSTR/3B) and that the Supreme Court judgment referred to within Ashok Varandan ( Assistant Commissioner (CT) LTU, Kakinada & Ors. v. Glaxo Smith Kline Consumer Health Care Limited ) implicitly suggests that courts possess "ample powers to condone the delay in preferring the appeal," even where the alternative statutory remedy wasn't availed within the extended period.

Decision and Implications

For these reasons, the High Court found the writ petition maintainable and proceeded to entertain it. The Court quashed the Joint Commissioner's order dated June 11, 2024, which had dismissed the appeal on limitation.

Consequently, the original statutory appeal (Order-in-Appeal 425) was restored to the file of the Joint Commissioner for adjudication on its merits. The restoration was made subject to the petitioner depositing any applicable late fee, penalty, and other statutory deposits required for entertaining the appeal.

This ruling underscores the discretionary power of High Courts under Article 226 to intervene in cases where adherence to strict statutory limitation periods by administrative authorities could lead to potential injustice, thereby providing a potential avenue for assessees whose GST appeals are dismissed solely on grounds of delay.

The D.B. Civil Writ Petition No. 111763/2024 was allowed in these terms.