TaxTMI 
TaxTMI 
PART-1.2
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Background
In my earlier article titled “No Communication, No Delay”, we discussed that the limitation for filing an appeal under section 107 of the CGST Act commences only from the date on which the adjudication order is communicated to the aggrieved person. Unless there is actual or constructive communication (knowledge) of the order, limitation does not commence and, consequently, there is no delay. Certainly, date of communication would have to be explained with documents.
Once communication is established, however, an equally important question arises:-
Can the delay in filing an appeal be condoned?
Answer depends upon the stage at which appeal is filed. A careful reading of section 107 reveals that the law contemplates three distinct stages, each governed by different legal principles: -
I. Within the specified Limitation Period,
II. Within the specified Condonation Period,
III. After the expiry of specified Condonation Period.
[This Paper does not cover the cases of “exclusion of time period”, where the taxpayer is seeking other legal remedies, such as filing of rectification of mistake, writ petition, etc.]
1. Stage I – Appeal Filed Within Three Months: A Statutory Right
section 107(1) of the CGST Act grants every aggrieved person a statutory right to file an appeal within three months from the date of communication of the decision or order.
Where the appeal is presented within this period:
o it is within limitation;
o as there is no delay, no further explanation is required;
o the Appellate Authority is bound to entertain the appeal, subject to other requirements, such as pre-deposit, enclosing prescribed documents, etc.
The right to appeal within the specified/prescribed period is an absolute statutory right. Once the appeal is filed within three months from the date of communication, the question of condonation simply does not arise.
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2. Stage II – Appeal Filed After Three Months, but Within the Statutory Condonable Period: A Statutory, but Discretionary Power
Sub-section (4) of section 107 of the CGST Act empowers the Appellate Authority to admit an appeal filed after the prescribed period, provided it is presented within the further period specified in the statute (one month) and the appellant satisfies the authority that he was prevented by “sufficient cause” from filing the appeal within time.
This stage does not confer an absolute right upon the appellant. Equally, it does not permit the Appellate Authority to reject the appeal mechanically. The discretion conferred by the statute is a judicial discretion, which must be exercised fairly, reasonably and on settled legal principles.
Meaning of “Sufficient Cause”
The expression “sufficient cause” has not been defined in the CGST Act. However, the expression should receive a liberal construction to advance substantial justice: -
• In Collector, Land Acquisition vs. Mst. Katiji 1987 (2) TMI 61 - Supreme Court, the Hon’ble Supreme Court observed that ordinarily a litigant does not stand to benefit by lodging an appeal late and that technical considerations should not outweigh substantial justice.
• Similarly, in N. Balakrishnan vs. M. Krishnamurthy 1998 (9) TMI 602 - Supreme Court, the Hon’ble Court held that length of delay is not material; the acceptability of the explanation is the decisive factor. A bona fide explanation, free from negligence or mala fides, should ordinarily receive a liberal consideration.
The expression “sufficient cause” is intentionally elastic. No rigid or exhaustive definition is possible. Each case must be decided on its own facts.
Illustrative Circumstances Constituting Sufficient Cause
- Depending upon facts, following circumstances may constitute sufficient cause: -
o serious illness, hospitalisation, death or critical illness in the immediate family;
o natural calamities or unforeseen events;
o genuine technical glitches on the GST portal;
o delay in obtaining relevant records or documents;
o bona fide mistake regarding the appropriate legal remedy; or
o any other circumstance beyond the reasonable control of the appellant.
- On the contrary, following circumstances would not ordinarily constitute sufficient cause:
o deliberate inaction and intentional disregard of statutory timelines;
o gross negligence and lack of bona fides;
o casual or unexplained delay; or
The Appellate Authority must therefore balance the need for finality of litigation with the requirement of advancing substantial justice.
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3. Stage III – Appeal Filed Beyond the Maximum Statutory Period
3.1 In this Stage-III, we are discussing those cases where the Order has been communicated (comes in the knowledge of the taxpayer), but he fails to file appeal within the specified period including the condonation period, may be due to certain unavoidable reasons and circumstances. If, on the other hand, the taxpayer is pleading the non-communication of order, relief may be allowed even by the appellate authority.
The legal position changes completely once the statutory period together with the permissible condonable period expires. At this stage, the Appellate Authority loses jurisdiction to entertain the appeal. The question is no longer whether “sufficient cause” exists. The real issue is one of jurisdiction.
This principle has been consistently affirmed by the Hon’ble Supreme Court: -
• In Singh Enterprises vs. CCE 2007 (12) TMI 11 - Supreme Court, the Hon’ble Court held that where the statute prescribes an outer limit up to which delay may be condoned, the appellate authority has no jurisdiction to condone any delay beyond that period.
• Same principle was reiterated in Asstt. Commissioner (CT) vs. Glaxo Smith Kline Consumer Health Care Ltd. - 2020 (5) TMI 149 (SC), where the Hon’ble Supreme Court held that High Courts should ordinarily not exercise writ jurisdiction to bypass the legislative scheme of limitation, merely because the statutory remedy has become time-barred. [Also, CCE vs. Hongo India (P) Ltd. 2009 (3) TMI 31 - Supreme Court]
Thus, once the statutory outer limit expires, the Appellate Authority becomes functus officio so far as limitation is concerned.
3.2 Can Constitutional Courts Still Interfere?
Although the Appellate Authority cannot entertain an appeal beyond the statutory outer limit, the constitutional jurisdiction of the High Courts under Articles 226 of the Constitution remains intact. However, such jurisdiction is extraordinary and is exercised sparingly.
The High Court does not extend limitation; it exercises its constitutional power to prevent manifest injustice. The Courts ordinarily interfere only in exceptional cases involving: -
o absence of jurisdiction;
o violation of principles of natural justice;
o non-service or non-communication of the adjudication order;
o proceedings wholly without authority of law; or
o other exceptional circumstances warranting constitutional intervention.
3.3 Application of Section 5 of the Limitation Act
Courts have debated over the issue whether, inspite of specific limitation provision in a given statute, the provisions of Section 5 read with section 29(2) of the Limitation Act, 1963 would apply? It is also argued that whether the Appellate Authority or the GST Appellate Tribunal can invoke Section 5 of the Limitation Act, 1963 to condone delay beyond the period prescribed in the CGST Act?
Section 5 of the Limitation Act reads as,-
“5. Extension of prescribed period in certain cases.- Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.
Explanation…. Not given here”
The application of Section 5 can be excluded by the civil laws, but it should be by way of an express exclusion. Therefore, in the absence of the same, Section 5 of the Limitation Act can be read into such special or local law. This principle has consistently been affirmed in the revenue laws by the Supreme Court.
Further, Section 5 empowers only a “Court” to condone delay. It does not automatically apply to statutory appellate or quasi-judicial authorities and tribunals, unless expressly incorporated by the special statute. Furthermore, the Courts also cannot condone delay, if there is express exclusion by the civil laws. The GST Law does not any express exclusion.
It may also be noted that an extension under Section 5 is distinct and different from exclusion of certain time provided under sections 12 to 24 of the Limitation Act. The application of Section 5 results in the extension of the period of limitation and cannot bring the delay within the fold of the period of limitation, whereas the application of Part III (sec 12 to 24) results in exclusion, which brings the same within the fold of the period of limitation. Therefore, Section 5, on the one hand, and sections 12 to 24, on the other, operate in different fields.
Important Supreme Court Decisions:
• Commissioner of Sales Tax vs. Parson Tools & Plants - 1975 (2) TMI 86 (SC): Statutory authorities functioning under fiscal statutes cannot invoke the Limitation Act to enlarge the period of limitation beyond what the statute expressly permits.
• Sakuru vs. Tanaji - 1985 (7) TMI 347 (SC): Section 5 of the Limitation Act applies to courts and not to quasi-judicial authorities or statutory tribunals unless the special statute expressly provides otherwise. [Also, M. P. Steel Corp. vs. Commissioner of Central Excise- 2015 (4) TMI 849 (SC)]
• Dy. Commissioner & Special Land Acquisition Officer vs. S. V. Global Mill Ltd. 2026 (4) TMI 505 (SC); relying upon, Consolidated Engg. Enterprises vs. Irrigation Deptt. 2008 (4) TMI 668 - Supreme Court: The Hon’ble Supreme Court reaffirmed that statutory tribunals derive their power of condonation only from the governing statute. The applicability of the Limitation Act depends upon express statutory incorporation.
Accordingly, the Appellate Authority under the GST Law derives its power to condone delay only from sub-section (4) of section 107 of the Act, and not from Section 5 of the Limitation Act.
Nevertheless, to avail the benefit of Section 5 of the Limitation Act and relief of condonation from the Court, the taxpayer has to satisfy the Court that he had “sufficient cause” for not preferring the appeal within such period.
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4. Practice Pointer
Before deciding whether the appeal is time-barred, answer these four questions:
i. When was the order actually or constructively communicated? → Limitation starts from the date of communication: Need to be pleaded if different from date or order.
ii. Is the appeal still within the initial three-month limitation period? → No question.
iii. If not, is it still within the statutory condonable period with sufficient cause? → Sufficient cause to be proved for the satisfaction of the Appellate Authority.
iv. If both periods have expired, do exceptional circumstances exist for invoking the writ jurisdiction of the High Court? → Sometimes, its answer also lies in first question – Communication vs. Date of Order; or, otherwise, there should be some exceptional reasons, such as, medical reasons, natural calamities, etc.
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5. Practical Takeaways
The following practical points may help taxpayers safeguard their valuable right of appeal under the GST law:
i. Never compute limitation from the date of the order: Always ascertain the actual date on which the adjudication order was communicated. Try to plead the date of communication first, if the facts so warrants, instead of the condonation of delay.
ii. Preserve evidence of the date of communication: Maintain copies of e-mails, SMS alerts, portal screenshots, postal acknowledgements, or any other documents establishing the date on which the order was first communicated. This evidence may become crucial if limitation is disputed.
iii. Do not wait until the last date: Although the statute allows three months for filing an appeal, it is advisable to file the appeal at the earliest. Even if there is a delay, file the appeal at the earliest along with condonation application; and if the first appeal is rejected, file appeal before the Tribunal. Sometimes, the High Court directs the taxpayer to avail the alternate remedy first.
iv If there is a delay, explain every day only where necessary: While the law no longer insists upon a pedantic explanation of every day's delay, the explanation must nevertheless be reasonable, bona fide and supported by evidence. A vague or general explanation is seldom sufficient.
v. Support the condonation application with documentary evidence: Where condonation is sought, the application should be supported by relevant documents such as medical records, travel records, technical error reports, correspondence with the department, or any other evidence explaining the delay.
vi. Constitutional remedies are available only in exceptional cases: Where the statutory appellate remedy is no longer available, examine whether the case involves exceptional circumstances, which may justify invoking the writ jurisdiction of the High Court. Whenever relying upon a judgment, look at its facts —cases pertaining lack of communication of order fall under different category.
vii. Remember that limitation is both a question of law and fact: The computation of limitation is not merely an arithmetic exercise. It often depends upon factual issues such as communication of the order, knowledge of its contents, and the existence of sufficient cause for the delay. Proper documentation and timely legal advice are therefore essential.
viii. Prevention is better than litigation: Develop an internal system for regularly monitoring the GST portal, maintaining updated e-mail IDs and mobile numbers on the GST registration. Many disputes on limitation can be avoided through timely compliance and effective record management.
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Conclusion
section 107 of the CGST Act creates a carefully balanced statutory framework governing appeals. The Legislature has consciously recognised three distinct stages:
1. An absolute statutory right to file an appeal within three months from the date of communication;
2. A limited discretionary power to condone delay within the further period prescribed by the statute upon showing sufficient cause; and
3. A jurisdictional bar beyond the statutory outer limit, where neither the Appellate Authority nor the GST Appellate Tribunal can enlarge the limitation by invoking Section 5 of the Limitation Act.
While the constitutional jurisdiction of the High Courts always remains available, it is not an appellate extension of the statutory limitation. It is an extraordinary constitutional remedy exercised only in exceptional cases to prevent manifest injustice.
Ultimately, limitation under section 107 of the CGST Act is not merely a matter of counting days. It is a matter of identifying the source of the right, the extent of statutory discretion, and the limits of jurisdiction.