2025 (7) TMI 915 - HC - GST

Dismissal of petitioner s appeals on the ground of delay - appeals were filed 7/8 days beyond the prescribed period of limitation and were not accompanied by any application seeking condonation of delay - sufficient cause for delay present or not - HELD THAT - From the circumstance that the petitioners were heard on merits it is inclined to accept the petitioner s version. Besides under Section 107 (4) of the CGST Act delay of further 1 month beyond the prescribed limitation period of three months is condonable upon showing sufficient cause. In the present case sufficient cause is writ large because the petitioners went back on the date of the postal communication. Upon cumulative consideration of the facts and circumstances therefore the impugned orders are quashed and the petitioner s appeals remitted for consideration on merits. Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in these petitions were:

• Whether the appeals filed by the petitioners were barred by limitation, considering the prescribed period under Section 107 of the CGST Act, 2017, and the dates of electronic uploading versus postal service of the Order-In-Original (O-I-O).
• Whether the delay of 7/8 days in filing the appeals, if any, could be condoned in the absence of a formal application for condonation of delay accompanying the appeals.
• Whether the appellate authority was justified in dismissing the appeals solely on the ground of limitation without addressing the merits of the appeals.
• Whether the petitioners' contention that they were ready to file condonation applications but were informed that the matter could be argued on merits warranted consideration.
• Whether the appeals should be remanded for consideration on merits despite the delay and procedural lapses.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Determination of the Limitation Period and Computation of Delay

The legal framework governing limitation for filing appeals is Section 107 of the CGST Act, 2017, which prescribes a limitation period of three months from the date of communication of the Order-In-Original. The Court noted that the O-I-O was dated 13 December 2023 but electronically uploaded on 20 December 2023, and served by post on 3 January 2024.

The petitioners filed their appeals on 27 and 28 March 2024, respectively. If the date of postal communication (3 January 2024) is taken as the starting point, the appeals were filed within the three-month limitation period. However, if the date of electronic uploading (20 December 2023) is considered, the appeals were filed with a delay of 7/8 days.

The Court observed that the prescribed limitation period is triggered by communication of the order, which traditionally means service upon the party. The petitioners were served by post on 3 January 2024, which supports their contention that the appeals were timely filed.

Issue 2: Condonation of Delay in Absence of Formal Application

Section 107(4) of the CGST Act permits condonation of delay up to one month beyond the prescribed limitation period upon showing sufficient cause. The appellate authority dismissed the appeals citing the absence of any application for condonation of delay and the delay of 7/8 days.

The petitioners contended that they had kept applications for condonation of delay ready but were informed that the matter could be argued on merits since they had not yet received postal communication of the O-I-O. This factual assertion was not disputed by the respondents.

The Court found the petitioners' explanation credible, especially since they were heard on merits despite the absence of a condonation application. The Court held that the delay was caused by the difference in dates of electronic uploading and postal service, and that sufficient cause existed for condonation.

Issue 3: Dismissal of Appeals Without Adjudication on Merits

The appellate authority dismissed the appeals solely on limitation grounds without addressing the substantive issues raised by the petitioners. The Court emphasized that such dismissal without considering the merits, particularly when sufficient cause for delay exists, is not justified.

The Court noted that the petitioners were heard on merits, indicating that the appellate authority had an opportunity to consider the substantive issues but chose to dismiss on procedural grounds.

Issue 4: Remand for Consideration on Merits

Considering the above facts and circumstances, the Court exercised its supervisory jurisdiction to quash the impugned orders and remand the appeals to the appellate authority for fresh consideration on merits.

The Court left all contentions on merits open for adjudication by the appellate authority, thereby ensuring that procedural technicalities do not preclude substantive justice.

Issue 5: Challenge to Notification

One of the petitions included a challenge to a Notification dated 31 March 2023. The Court explicitly refrained from adjudicating upon this challenge, leaving it open for consideration in the appropriate forum.

3. SIGNIFICANT HOLDINGS

The Court held:

"Upon cumulative consideration of the facts and circumstances, therefore, we quash the impugned orders and remit the petitioner's appeals for consideration on merits."

"All contentions of all parties on the merits of the matter are left open to be decided by the appellate authority pursuant to this remand."

Core principles established include:

• The date of communication of an order for limitation purposes under the CGST Act is the date of service upon the party, not merely the date of electronic uploading.
• Delay caused by reliance on the date of postal communication rather than electronic uploading can constitute sufficient cause for condonation of delay under Section 107(4) of the CGST Act.
• An appeal should not be dismissed solely on limitation grounds without considering the merits, especially where the petitioner has been heard on merits and sufficient cause for delay exists.
• The appellate authority is expected to exercise discretion judiciously and consider substantive issues rather than mechanically dismissing appeals on procedural grounds.

Final determinations:

• The appeals were not barred by limitation when the date of postal communication is considered.
• The absence of a formal condonation application was not fatal given the circumstances and the petitioners' readiness to file such application.
• The impugned orders dismissing the appeals on limitation grounds were quashed.
• The appeals were remanded for fresh adjudication on merits.