DISMISSAL OF APPEAL AT APL-02 STAGE, Goods and Services Tax - GST

[Sadanand Bulbule]

In terms of Section 107(1), threes months time is given to file an appeal against any order/decision. Further one month time is given under Section 107(9) to admit the appeal petition filed beyond three months, if the Appellate Authority is satisfied for the cause demonstrated by the appellant.

Contrary to the above legal position, some Appellate Authorities, without considering the genuine reasons for condonation of delay under Section 107[9], are dismissing the appeals by indicating the reason- "filed beyond prescribed period" while issuing APL-02 itself. Meaning, there is no separate & speaking order for dismissal.

Despite the mandatory provision of Section 75[4] and umpteen number of binding rulings of the High Courts/Apex Court, no opportunity of personal hearing is provided. This is clear violation of PNJ.

Are such cases fit to restore appeal petitions under Section 107[1] via 161 or to approach the High Court under Article 226? Second option is very expensive and time consuming process.

Posts / Replies

[YAGAY andSUN]

Dear Sir,

Your concern touches on a recurring procedural irregularity that violates the statutory mandate under the CGST Act as well as established principles of natural justice (PNJ). Let’s address the issue in strict legal terms:

Legal Framework Analysis

Section 107(1), CGST Act, 2017:

“Any person aggrieved by any decision or order passed under this Act…may appeal…within three months from the date on which such decision or order is communicated…”

Section 107(4):

Mandates an opportunity of being heard when requested or when adverse order is proposed.

Section 107(9):

Allows condonation of delay up to one further month, if the Appellate Authority is satisfied that the appellant was prevented by sufficient cause.

Violation of Section 107(9) and Section 75(4):

Mechanical dismissal of appeals as “barred by limitation” without speaking order or consideration of grounds for delay violates the doctrine of discretionary satisfaction under Section 107(9).

Non-grant of personal hearing or refusal to pass a reasoned order amounts to a breach of Section 75(4) of the CGST Act and Article 14 of the Constitution.

The issuance of APL-02 with a non-speaking rejection, in lieu of a formal speaking order, contravenes the procedural mandate and well-settled jurisprudence including:

• Kumaran Silks v. Appellate Deputy Commissioner (ST) [(Madras HC)] –  Personal hearing is mandatory even in appellate rejection.
• Mohinder Singh Gill v. Chief Election Commissioner [(1977 (12) TMI 138 - SUPREME COURT] – Administrative decisions must stand on their own reasoning, not supplemented later.

Remedy Options:

Option 1: Filing Rectification under Section 161 (Restoration)

Section 161 empowers rectification of errors apparent on record, whether on motion of the authority or on application by the affected person.

The failure to exercise discretion under Section 107(9) and absence of a speaking order is an error of jurisdictional nature, and thus, qualifies as an "error apparent."

Therefore, you may seek restoration of appeal on the grounds that:

• The Appellate Authority failed to pass a reasoned and speaking order.
• The authority refused to exercise jurisdiction under Section 107(9), which is permissible and mandatory upon sufficient cause.

Suggested Relief:

File a rectification application under Section 161 read with principles of natural justice and judicial discipline, requesting restoration of the appeal and fresh consideration on merits.

Option 2: Writ Petition under Article 226

A writ under Article 226 is maintainable against such arbitrary and non-speaking orders.

However, as you rightly stated, it is costly and time-consuming, and should be used only when the rectification application under Section 161 is denied or not acted upon within a reasonable time.

Conclusion (in legal language):

1. The rejection of appeals via APL-02 without a speaking order, and without examining the plea for condonation under Section 107(9), is patently illegal. Such mechanical action not only defeats the statutory right to appeal, but also violates Section 75(4) and the principles of natural justice.
2. Such cases are fit for rectification and restoration under Section 161, and writ jurisdiction under Article 226 may be invoked only as a secondary recourse. The Appellate Authority’s inaction to pass a reasoned order constitutes a jurisdictional error and breach of quasi-judicial duty.

Appendix - 1

Below is a professionally drafted sample application under Section 161 of the CGST Act for restoration of an appeal wrongly dismissed without a speaking order or opportunity of hearing:

Application for Rectification under Section 161 of CGST Act, 2017

To

The Appellate Authority

[Office of the Appellate Authority / Designation]

[Address]

[City, State, PIN]

Subject: Application under Section 161 of the CGST Act, 2017 for rectification of error apparent on record in relation to dismissal of appeal vide APL-02 – Request for restoration of appeal.

Reference:

• GSTIN: [Your GSTIN]
• Order-in-Original No.: [Insert No. and Date]
• APL-01 filed on: [Date]
• APL-02 rejection dated: [Date]
• APL Reference Number: [Insert, if available]

Respected Sir/Madam,

The undersigned submits the following application for your kind consideration:

1. That I had filed an appeal in Form APL-01 against the above-referenced Order-in-Original passed by the adjudicating authority, within the extended limitation period as provided under Section 107(9) of the CGST Act, 2017, along with a detailed prayer seeking condonation of delay.
2. That without considering the genuine grounds of delay and without providing any opportunity of being heard as required under Section 75(4), the appeal was mechanically rejected as "time-barred" via Form APL-02. The said rejection does not constitute a speaking order as mandated under law, and does not reflect any exercise of judicial discretion under Section 107(9).
3. That it is a settled principle of law that the right of appeal is a substantive statutory right, and discretionary powers under Section 107(9) must be exercised upon objective satisfaction of the reasons stated for delay. The denial of such opportunity and absence of a reasoned order amount to an error apparent on the face of record within the scope of Section 161 of the Act.
4. That as per the principles laid down by Hon'ble Courts including in Mohinder Singh Gill v. Chief Election Commissioner 1977 (12) TMI 138 - SUPREME COURT and multiple GST-related rulings, non-speaking administrative actions are liable to be set aside for violating natural justice and procedural fairness.

Prayer

In view of the above, it is respectfully prayed that:

• The impugned rejection of appeal vide APL-02 may kindly be rectified under Section 161 of the CGST Act, 2017;
• The appeal may be restored to its original number, and the application for condonation of delay may be considered on merits;
• An opportunity of personal hearing be granted in accordance with Section 75(4) prior to any decision on the maintainability of the appeal.

I/We shall remain obliged for your kind and lawful consideration of this application.

Place: [City]

Date: [DD/MM/YYYY]

Yours faithfully,

[Your Name]

[Designation, if applicable]

[Name of Taxpayer/Entity]

[GSTIN]

[Email ID] | [Phone Number]

 

[Sadanand Bulbule]

Dear Yagay Sir

Thank you so much for endorsing my expressions, besieds providing judicial rulings and template of application for ready use. These days your replies are also accompanied by purposeful comments and suggestions. 

Let the querists harvest due benefits from TMI D-Forum. 

Regards 

[Sadanand Bulbule]

* besides 

[YAGAY andSUN]

Thanks Sir.

[Sadanand Bulbule]

2025 (3) TMI 607 - KARNATAKA HIGH COURT - M/S. SRI. NANDI STUDIO AND COLOUR LAB. VERSUS THE ASST. COMMISSIONER OF CENTRAL TAX, SHIVAMOGGA THE COMMISSIONER OF CENTRAL TAX (APPEALS) MYSURU.

Appeal of petitioner rejected solely on the ground that the statutory deposit of 10% is not deposited along with appeal - HELD THAT:- Section 107 of the 2017 Act provides for appeal against decision or order passed under the Act and it also prescribes three months time to file appeal from the date of communication of the order. Further, one month extended time is provided under Section 107 (4) of 2017 Act to file appeal and the said period could be condoned if acceptable cause is shown - Section 107 (6) (b) of 2017 Act states that no appeal shall be filed under Section 107 (1) of 2017 Act, unless the appellant pay a sum equal to 10% of the remaining amount of tax in dispute arising from the order under appeal.

In the instant case, though the petitioner has not deposited the amount as required under Section 107 (6) (b) of 2017 Act along with appeal, but deposited the said 10% of the amount within five days from the date of filing of the appeal. Both filing of the appeal and deposit as required under Section 107 (6) (b) of 2017 Act was within the period of limitation prescribed under Section 107 (1) of 2017 Act. A liberal interpretation is to be given to Section 107 (6) of 2017 Act and if the statutory deposit as required is made within the limitation prescribed under Section 107 (1) of 2017 Act, then it shall be treated as deposit made along with appeal. The petitioner filed an appeal as well as deposited the statutory deposit within the period of limitation prescribed under Section 107 (1) of 2017 Act.

Conclusion - The Appellate Authority's rejection of the appeal on the sole ground of timing of the deposit was erroneous. The statutory deposit, being made within the limitation period, fulfilled the legal requirements, and the appeal should be considered on its merits.

Petition allowed.

[Sadanand Bulbule]

Dear all

It is pertinent to note that, the Hon'ble High Court of Karnataka in its judgement dated 22/01/2025 rendered in the case of Deepak Stores Pvt Ltd, Bellary Vs. The Joint Commissioner of Commercial Taxes (Appeals), Davanagere - 2025 (2) TMI 996 - KARNATAKA HIGH COURT has set aside the order rejecting the admission of appeal without examining the sufficient cause for delay and failure to condone the delay under Section 107[4] and has restored the appeal petition for consideration.

So the Appellate Authorities should not apply the "jungles laws" in denying due justice to the already aggrieved taxpayers. Rather they should remember that, they too are living in the democratic society.

Minimum sense can create maximum benefits, without extra cost.