Bank account freezing by tax authorities constitutes sufficient cause for delayed appeal filing under Section 107(4) CGST Act 2017

The AP HC allowed a petition challenging rejection of an appeal on time limitation grounds. The petitioner's bank account was frozen by tax authorities, preventing timely filing and mandatory 10% pre-deposit of disputed tax. The HC held that freezing of bank accounts constituted sufficient cause for delay under Section 107(4) of CGST Act, 2017. Following Supreme Court precedent, the court emphasized that cause for delay, not length of delay, is paramount consideration. The Commissioner's rejection was deemed unreasonable as authorities cannot deny appeal rights while simultaneously freezing accounts needed for compliance. The impugned order was set aside.

---

---

Issues:
The judgment involves the rejection of an appeal by the Appellate Authority under the A.P. G.S.T Act, 2017, based on delay in filing and the subsequent challenge to this rejection.

Details of the Judgment:

Issue 1: Appeal Rejection and Delay in Filing
The petitioner, a registered dealer engaged in the business of iron scrap, challenged an order ascertaining a taxable amount. The Appellate Authority rejected the appeal due to a delay of 25 days in filing, despite the petitioner's accounts being frozen, causing financial constraints. The petitioner argued that the delay was justified due to the financial crisis and freezing of accounts, hindering the mandatory pre-deposit requirement for filing the appeal.

Issue 2: Condonation of Delay
The Court analyzed Section 107 of the CGST Act, 2017, which allows for the condonation of delay if the appellant was prevented by sufficient cause. Referring to legal precedents, the Court emphasized a "justice-oriented approach" in interpreting "sufficient cause" and highlighted the importance of considering the reasons behind the delay rather than a strict timeline.

Issue 3: Legal Interpretations
The Court cited legal principles that guide the condonation of delay, emphasizing the importance of substantial justice over technicalities. It noted that the Commissioner (Appeals) cannot exceed the permissible period for condonation as specified in the statute, and strict interpretation of fiscal statutes is required.

Conclusion:
Ultimately, the Court found the reasons for the delay provided by the petitioner to be valid, considering the financial crisis and frozen accounts. The rejection of the appeal by the Appellate Authority was deemed unjustified, and the impugned order was set aside. The Court directed the Appellate Authority to restore the appeal and proceed with the matter according to law, ruling in favor of the petitioner.

---