Condonation of delay. No more res integra

Condonation of Delay- No more res integra

1. The provisions on appeal to First Appellate Authority are contained in section 107 of the CGST Act 2017. Sub section (1) provides for a time limit of three months from the date on which the said order or decision is communicated to the taxpayer. Sub section (4) provides for admission of the appeal within a further period of one month on sufficient cause.
2. The appellate authorities in most of the cases took a stand that any appeal which is filed after a period of four months from the date on communication of the order has to be summarily rejected as the first appellate authority have no powers to condone the delay beyond   four months as contained in section 107.
3. The legislature had sufficient wisdom while drafting the Section 107 and the legislative intent was not to curtail the powers of the first appellate authority from condoning the delay beyond four months, provided there was sufficient cause for not filing the appeal in time.
4. Section 5 of the Limitation Act 1963 is highly relevant here which provides for condonation of a larger period provided there exists “sufficient cause”. The first appellate authorities are generally not inclined to exercise the powers vested on them under the limitation act and almost in all cases, do not go to the merits of the case but simply reject the appeal on the sole ground of limitation.
5. The question whether provisions of section 5 of the limitation act 1963 are available under GST law was examined by various high courts and it was held in many cases that the limitation act is applicable.
6. Section 29 (2) of the limitation act 1963 categorically state that the provisions contained in section 5 of the limitation act 1963 is not applicable only when it is expressly provided so whereas in Section 107 of the CGST Act there is no such mention either expressly or impliedly and accordingly, provisions of section 5 of the limitation act 1963 are applicable to GST Law.
7. The Calcutta High Court in the matter of Abdul Aziz Sarkar Vs Assistant Commissioner of Revenue held on 02/04/2025 reported in 2025 (4) TMI 1660 that the first appellate authority has erred in rejecting the appeal solely on limitation ground without looking the merits of the case.
8. The operative portions of the above Calcutta High court order are furnished below.
9. The appellate authority did not consider the prayer for condonation of delay on its merit.
10.  By applying the ratio laid down by the Honble Division Bench in S.K. Chakraborty and Sons (supra), this Court is of the considered view that the appellate authority was not justified in rejecting the appeal petition solely on the ground that the same was filed beyond the maximum period of four months.
11. For  such reason, this Court is inclined to interfere with the order impugned.
12.  Accordingly the order dated July 16, 2024 stands set aside and quashed. The application for condonation  of delay filed by the petitioner before the appellate authority stands restored to the file of the appellate authority.
13.  The appellate authority is directed to consider such application and decide the said application on merits and in accordance with law by passing a reasoned order after giving opportunity of hearing to the respective parties.
14.  Authorities are expected to take care of the applications on condonation of delay in a more appropriate manner taking note of the applicability of the limitation act subject to sufficient cause.
15. It may be noted that only a convincing reason such as a death of a family member, hospitalisation of the dealing official/ partner/director could be sufficient cause and no lame excuses such as busy/ non aware of the legal position etc.
16. Tax professionals may take utmost care in preferring the appeals in time to avoid rejection on limitation ground.
17. Wherever the first appellate authority has already rejected the appeal on the sole ground of limitation and the date of order of the OIA is less than three months may prefer appeal under section 112 (1) and in other cases under section 112 (6) along with application for condonation of delay on justifiable grounds.