Supreme Court Upholds GST Appeal, Directs Reconsideration Beyond Rigid Timeframe Interpretation Under Section 107

The SC allowed the petition challenging the dismissal of an appeal by the Additional Commissioner under the UP GST Act. The appellate authority had rejected the appeal for exceeding the four-month period, calculating months as 30 days. The SC directed the authority to reconsider the appeal on merits, emphasizing the need to evaluate sufficient cause for delay rather than mechanically dismissing the appeal based on strict time calculations.

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Issues involved:
The issue in this case revolves around the dismissal of an appeal by the Additional Commissioner Grade-2 (Appeal) Sitapur on the grounds of exceeding the prescribed period of four months for filing the appeal under Section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017.

Summary:
The petitioner filed a petition under Article 226 of the Constitution of India seeking to set aside the order dated 27.02.2023 passed by the Additional Commissioner Grade-2 (Appeal) Sitapur in Appeal No. 112 of 2022 for the year 2021-22 (tax period October and November 2021). The appeal was dismissed due to exceeding the maximum period of four months as prescribed by the statute. The prescribed authority had confirmed a demand of Rs. 49.74 Lakhs vide order dated 07.06.2022. The appellate authority calculated four months as each month being of 30 days.

The provisions of Section 107 of the Act, 2017 state that an appeal must be filed within three months from the date on which the order is communicated, with a provision for a further period of one month if there is sufficient cause preventing the appeal from being filed within the initial three months. The court noted that the four-month period mentioned in the Act may vary in terms of the actual number of days, such as 121 or 122 days. In this case, the appeal was filed on the 121st day. The court emphasized that the appellate authority should have considered whether there was sufficient cause for the delay in filing the appeal within three months, rather than summarily dismissing it for exceeding 120 days.

The learned Additional Chief Standing Counsel did not dispute the legal or factual positions presented. Consequently, the appeal was restored to its original number, and the appellate authority was directed to proceed with the appeal and decide it on merit promptly and in accordance with the law. As a result, the petition was allowed, and the impugned order was quashed.

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