2026 (2) TMI 99 - HC - GST

Condonation of delay in GST statutory appeals granted under extraordinary constitutional jurisdiction where counsel negligence caused inaction

High Court exercised extraordinary constitutional jurisdiction to condone delay in filing a statutory GST appeal, finding that the delay resulted from ... Condonation of delay in statutory appeals - constitutional jurisdiction under Article 226 - right to appeal as a valuable statutory right - appellate authority's jurisdictional limits under the CGST regime - principle against rendering remedies illusory - limit prescribed by Section 107(4) - Section 5, Limitation Act, 1963 - Whether the High Court, in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India, is precluded from granting relief merely because the statutory period of limitation prescribed under Section 107 of the Central Goods and Services Tax Act, 2017 has expired - HELD THAT:- The delay arose due to the negligence or omission of the petitioner’s accountant/local advocate. Established legal principle is that a litigant should not be penalized for the mistake of counsel, and denial of statutory rights on this basis results in injustice. Cancellation of GST registration or missed appellate deadlines should not permanently debar a taxpayer from the GST framework, especially where the taxpayer intends to comply by filing returns, paying taxes, interest, and penalties, and rectifying defaults. In such cases, denial of opportunity to an assessee undermines the inclusive and facilitative objective of the GST regime. Non-restoration of GST registration in such cases also directly impairs the assessee’s ability to conduct business, earn a livelihood and leads economic paralysis, thus, violating Articles 14 and 21 of the Constitution by imposing disproportionate and unreasonable hardship. Reverting to the case in hand, as far as explanation qua the sufficient cause leading to the delay in filing the statutory appeal in the present case, we are of the opinion that the petitioner had filed his duly sworn affidavit stating therein that it was due to the fault of the counsel/consultant accountant, who was interested with the responsibility of handling these matters, since, the same requires the expertise of a professional and therefore, they were under the bona fide belief that the needful is being carried out in the consultant counsel. It is stated in the affidavit that it was due to the lack of communication and proper advisory on the part of the counsel/consultant accountant that the petitioner was deprived of taking timely steps to file the appeal within the prescribed period of limitation. Merely, because an objection was taken by the respondents that the affidavit of the petitioner is not accompanied by supporting affidavit of his consultant accountant/counsel, an act beyond the control of the petitioner, due to change of his counsel by him, the stand taken by petitioner cannot be given a short shrift. Taking a wholesome view, the writ petition is allowed. Issues: (i) Whether the High Court, in exercise of its constitutional jurisdiction under Article 226, can condone delay in filing a statutory appeal beyond the outer limit prescribed by Section 107(4) of the Central Goods and Services Tax Act, 2017, and whether the appellate order dismissing the appeal as time-barred can be set aside and the appeal remanded for adjudication on merits.Analysis: The statutory scheme under Section 107 prescribes a three month limitation for filing an appeal and permits condonation only for an additional period of one month upon satisfaction of 'sufficient cause.' Section 107(4) operates as an express statutory cap on the Appellate Authority's power to condone delay. However, constitutional jurisdiction under Article 226 is plenary and founded on principles of justice, equity and good conscience. Prior Division Bench precedents distinguishing Molana Construction on their facts do not constitute a binding exclusion of Article 226 powers. Coordinate High Court and other High Court authorities have held that while the Appellate Authority's power is confined by Section 107, the High Court may in appropriate cases exercise its constitutional discretion to prevent denial of remedy and avoid disproportionate hardship to a business. In the present case, affidavit evidence explained the delay as attributable to reliance on a consultant/advocate and unavoidable personal circumstances; the appellate authority rejected the appeal as time-barred without adjudicating merits. Considering the nature of fiscal legislation and the need to balance statutory limitation with prevention of manifest injustice, the writ jurisdiction can be exercised to condone delay where sufficient cause is shown and where refusal would result in denial of effective remedy.Conclusion: The delay of 160 days in filing the statutory appeal is condoned in exercise of Article 226 jurisdiction. The appellate order dismissing the appeal as time-barred is set aside and the appeal is remanded to the Appellate Authority for adjudication on merits in accordance with law.