TaxTMI 
TaxTMI 
2026 (6) TMI 1494
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....etitioner as the appellant on 23.05.2025 on the ground that the appeal was filed beyond a period of twenty-one days after expiry of normal period of limitation of three months and the extended period of limitation of one month from the date of passing of the Order-in-Original on 03.01.2025. 2. Before going into the issues raised in this writ petition, it would be apposite to narrate the facts which have led the petitioner to prefer the present writ petition against the Order-in-Appeal dated 19.02.2026. 3. The petitioner is registered assessee under the CGST Act and on application, GST Registration Certificate bearing no. GSTIN 18AHPPB7409J1Z2 has been issued to him. The petitioner is the proprietor of M/s Harekrishna Drugs and he carries on his business under the said trade name with his principal place of business at M.D. Road, Nagaon, Pin - 782001, District - Nagaon, Assam. 4. The respondent no. 3 on scrutiny of the records regarding the petitioner's Input Tax Credit [ITC] had reason to believe that the petitioner contravened the provisions of Section 16 and Section 39 of the CGST Act read with the provisions of the Assam Goods and Services Tax [AGST] Act, 2017 and the I....
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....se Notice dated 22.11.2024, a Summary of Show Cause Notice in Form GST DRC-01 was also uploaded in the common portal on 23.11.2024. 7. On receiving the Show Cause Notice, the petitioner, on 18.12.2024, filed a Reply wherein it was stated that an amount of Rs. 13,44,030.43 was claimed for the period - F.Y. : 2020-2021 as ITC but ITC auto-drafted in GSTR-2A showed the figure as Rs. 12,89,927.90. Therefore, the differences of ITC claimed was shown as Rs. 1,08,206/-. The petitioner claimed that the said figure was shown due to non-submission of GST by the supplier within the due date. The petitioner claimed that the ITC was shown in the next Financial Year. The petitioner for the purpose of clarification, also submitted a copy of GSTR-2B for the month of April, 2021 along with the Reply to contend that the amount of such difference of the ITC had remained unclaimed till date. With such contentions, the petitioner submitted that the records would reveal that there was no intention on the part of the petitioner to claim excess ITC and the same was merely a procedural error. 8. After submission of the Reply to the Show Cause Notice, the respondent no. 3 as the Adjudicating Authority....
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.... point no. 1 at the applicable rate in terms of sub-section [1] of Section 73 read with Section 50 of the CGST Act, 2017 read with relevant provisions of Assam GST Act and IGST Act, 2017. 9. On receipt of the Order-in-Original on 03.01.2025, the petitioner submitted an application for Rectification in terms of the provisions of Section 161 of the CGST Act before the Adjudicating Authority on 08.03.2025. In the Rectification Application, the petitioner projected that ITC amounting to Rs. 90,947/- was disallowed on the ground that it was an excess claim in GSTR-3B. Contending that the grounds specified in the Order-in-Original for disallowing the ITC were misplaced and the input of the ITC should be allowed, the petitioner sought for rectification of the Order-in-Original. However, the respondent no. 3 as the Adjudicating Authority on 24.04.2025, rejected the petitioner's Rectification Application on the ground that the reason cited in the application was not found satisfactory. 10. It was after rejection of the Rectification Application on 24.04.2025, the petitioner filed the Appeal before the Appellate Authority in Form GST APL-01 under Section 107 of the CGST Act on 23.05.20....
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....diction properly. It is, thus, evident that the Adjudication Authority rejected the Rectification Application without considering relevant factors. As the petitioner pursued the proceeding before the Adjudicating Authority in bona fide manner with due diligence, the Appellate Authority ought to have excluded the time period spent in the Rectification proceeding from the period of limitation while counting the limitation period of filing the appeal under Section 107 of the CGST Act. It is his submission that if the period spent during the Rectification proceeding is excluded, then the appeal was within the period of limitation, which was condonable. In that event, the Appellate Authority in the absence of any application for condonation of delay, ought to have given an opportunity to the petitioner-appellant to show that there was sufficient cause which prevented him to file the appeal within the normal period of limitation. 14. Mr. Keyal, learned Senior Counsel & Special Counsel, CGST appearing for the respondent CGST authorities has submitted that since the CGST Act is a special enactment and a specific period of limitation is provided for filing an appeal under Section 107 of ....
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....* * [4] The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month. [5] Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed. [6] No appeal shall be filed under sub-section [1], unless the appellant has paid - [a] in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and [b] a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty crore rupees, in relation to which the appeal has been filed. [7] Where the appellant has paid the amount under sub-section [6], the recovery proceedings for the balance amount shall be deemed to be stayed. [8] The Appellate Authority shall give an opportunity to the appellant of being heard. * * * * * * * * * [12] The order of the Appellate Authority disposing of t....
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.... period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 [inclusive] shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law. 20. Section 29[2] of the Limitation Act prescribes that where any special or local law prescribed for any suit, appeal or application a period of limitation different from the period of limitation prescribed by the Schedule to the Limitation Act, the provisions of Section 3 of the Limitation Act shall apply as if such period was the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Section 4 to Section 24 shall apply only in so far as, and to the extent, they are not expressly excluded by such special or local law. In other words, when any special statute prescribes certain period of limitat....
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....rged that the Rectification Application and the Order passed thereon have significant bearing on the point of exclusion of time period vis-à-vis the period of limitation. 23. At this juncture, a reference to Section 161 of the CGST Act is relevant. Section 161 has provided for rectification of errors apparent on the face of record. Section 161 has provided as under:- Section 161. Rectification of errors apparent on the face of record.- Without prejudice to the provisions of Section 160, and notwithstanding anything contained in any other provisions of this Act, any authority, who has passed or issued any decision or order or notice or certificate or any other document, may rectify any error which is apparent on the face of record in such decision or order or notice or certificate or any other document, either on its own motion or where such error is brought to its notice by any officer appointed under this Act or an officer appointed under the State Goods and Services Tax Act or an officer appointed under the Union Territory Goods and Services Tax Act or by the affected person within a period of three months from the date of issue of such decision or ord....
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....alf of the respondents. The maintainability and entertainability of the writ petition has been questioned on the premise that there is a statutory remedy in place for preferring an appeal under Section 112 of the CGST Act and the same issue, as raised herein, can also be raised in appeal. The issue needs to be addressed first before proceeding further. 27. The issues of maintainability and entertainability of a writ petition under Article 226 of the Constitution of India, despite alternative remedy provided by the relevant statutes, have come up for discussion in M/s Godrej Sara Lee Limited vs. Excise and Taxation Officer-cum-Assessing Authority and others, [2023] 3 SCR 871. It has been observed that the power to issue prerogative writs under Article 226 is plenary in nature. Any limitation on the exercise of such power must be traceable in the Constitution of India. Article 226 does not, in terms, impose any limitation or restraint on the exercise of power to issue writs. It has been held that though the exercise of writ powers despite availability of a remedy under the very statute which has been invoked and has given rise to the action impugned in the writ petition, ought not....
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....n was whether the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India ought to entertain a challenge to an Assessment Order dated 21.06.2017 raising a demand made under the provisions of Andhra Pradesh Value Added Tax Act, 2005 ['the 2005 Act', for short] and the Central Sales Tax Act, 1956 on the sole ground that the statutory remedy of appeal against that Order stood foreclosed by the law of limitation. Pursuant to the Assessment Order dated 21.06.2017, the respondent filed an application on 08.05.2018 highlighting an error made in raising the demand based on incorrect turnover and the said application came to be rejected by an Order dated 11.05.2018. Aggrieved by the Order dated 11.05.2018, the respondent filed an appeal before the Appellate Authority on 28.05.2018, which came to be rejected on 17.08.2018. Thereafter, the respondent filed an appeal before the Appellate Authority against the original Assessment Order dated 21.06.2017 under Section 31 of the 2005 Act on 24.09.2018. The said appeal was dismissed by the Appellate Authority on 25.10.2018 being barred by limitation and also, because no sufficient cause was made out. The respo....
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....period of sixty days prescribed under Section 31 of the 2005 Act from the date of communication of the Order dated 21.06.2017, the High Court cannot disregard the statutory period for redressal of the grievance and entertain the writ petition as a matter of course. The fact that the High Court has wide powers, does not mean that it would issue a writ which may be inconsistent with the legislative intent regarding the dispensation explicitly prescribed under Section 31 of the 2005 Act. That would render the legislative scheme and intention behind the stated provision otiose. Holding that the High Court ought not to have been entertained the subject writ petition filed by the respondent, the writ petition was dismissed by setting aside the impugned Judgment and Order of the High Court. 28.2. The Hon'ble Supreme Court has held as under :- 19. [.....] It is not a matter of taking away the jurisdiction of the High Court. In a given case, the assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same is without jurisdiction or passed in excess of jurisdiction - by ove....
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....ds limitation and there is the postulate that delay can be condoned for a further period not exceeding sixty days, needless to say, it is based on certain underlined, fundamental, general issues of public policy [.....] the policy behind the Act emphasising on the constitution of a special adjudicatory forum, is meant to expeditiously decide the grievances of a person who may be aggrieved by an order of the adjudicatory officer or by an appropriate Commission. The Act is a special legislation within the meaning of Section 29[2] of the Limitation Act and, therefore, the prescription with regard to the limitation has to be the binding effect and the same has to be followed regard being had to its mandatory nature. To put it in a different way, the prescription of limitation in a case of present nature, when the statute commands that this Court may condone the further delay not beyond 60 days, it would come within the ambit and sweep of the provisions and policy of legislation. It is equivalent to Section 3 of the Limitation Act. Therefore, it is uncondonable and it cannot be condoned taking recourse to Article 142 of the Constitution. 30. The propositions which clearly emerge from....
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....atutory remedy of the option of filing an appeal, which permits exercise of power under Article 226 of the Constitution to entertain a writ petition, not non-availability of the option of filing an appeal. [v] In the event the writ petition is filed within the period of limitation prescribed in the special enactment, the High Court has the discretion to entertain the writ petition, despite availability of statutory remedy of appeal under the special enactment before the special adjudicatory forum. 31. For the case in hand, it is of utmost relevance to examine the aspect first : whether the present writ petition under Article 226 of the Constitution of India is preferred within the period of limitation prescribed by the CGST Act, which is a special enactment. 32. The Order-in-Appeal, impugned herein, has been passed by the Appellate Authority on 19.02.2026. The said Order-in-Appeal is an appealable Order under Section 112 of the CGST Act. As per Section 112[1] of the CGST Act, an appeal against Order passed under Section 107 of the CGST Act can be preferred before the Appellate Tribunal within a period of three months from the date on which the Order sought to be appe....
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....ate the petitioner to the special adjudicatory forum, that is, the Appellate Tribunal constituted under the CGST Act. 34. It is a settled proposition that the doctrine of merger is not applicable to a case where an appeal is dismissed on the ground of limitation, without going into the merits. It has been held in Chandi Prasad vs. Jagdish Prasad, [2004] 8 SCC 724, to the effect that when an appeal is dismissed on the ground that delay in filing the same is not condoned, the doctrine of merger shall not apply. The Hon'ble Supreme Court of India in Raja Mechanical Company Private Limited vs. Commissioner of Central Excise, Delhi, [2012] 12 SCC 613, after referring to the decision in Chandi Prasad [supra], has held that if for any reason an appeal is dismissed on the ground of limitation and not on merits, that order would not merge with the order passed by the appellate authority. The same position has been reiterated in the case of Glaxo Smith Kline Consumer Health Care Limited [supra] by holding that rejection of delay application by the appellate forum does not entail in merger of the assessment order with that order. In view of such settled proposition, the issue involved in t....
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....996 ['the 1996 Act'] for setting aside an award made by the Arbitrator. The Hon'ble Court examined the provisions of Section 34 of the 1996 Act, and Section 5, Section 14 and Section 29[2] of the Limitation Act to answer the question. It has been held that there is a fundamental distinction between the discretion to be exercised under Section 5 and exclusion of the time provided in Section 14 of the Limitation Act. The power to excuse delay and grant an extension of time under Section 5 is discretionary whereas under Section 14, exclusion of time is mandatory, if the requisite conditions are satisfied. The effect of Section 14 is that in order to ascertain what is the date of expiration of the 'prescribed period', the days excluded from operating by way of limitation, have to be added to what is primarily the period of limitation prescribed. The total period of four months, prescribed in Section 34 of the 1996 Act within which an application for setting aside an arbitral award has to be made, being not unusually long, it could be unduly oppressive, if it is held that the provisions of Section 14 of the Limitation Act are not applicable to it, because cases are no doubt conceivable ....
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....efore a tribunal or a quasi-judicial body. The Hon'ble Supreme Court, at first, observed that the first four conditions laid down in Consolidated Engineering Enterprise case were found to have been met. However, condition no. 5 was not found to have been met stricto senso as both the proceedings were before quasi-judicial tribunals and not in the court. The Hon'ble Court has examined the question whether the Limitation Act extends beyond the court system and embraces within its scope quasi-judicial bodies as well. The Hon'ble Court has proceeded to hold that though Section 14 of the Limitation Act may not apply, yet the principles of Section 14 will get attracted in that case. The context of Section 14 would require that the term 'court' be liberally construed to include within it quasi-judicial tribunals as well. The reasoning put forward by the Hon'ble Court is that the principle of Section 14 is that whenever a person bona fide prosecutes with due diligence another proceeding which turns out to be abortive because it is without jurisdiction, or otherwise no decision could be rendered on merits, the time taken in such proceeding ought to be excluded as otherwise the person who ha....
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....ld be prosecuting another civil proceeding with due diligence and the prosecution should be in good faith. It is not enough that the one part is satisfied. Both due diligence and good faith must be established. 41. In the ONGC case, the decisions in M.P. Steel Corporation and Suryachakra Power Corporation Limited are considered, as a review application was filed before the Appellate Tribunal for Electricity therein in the interregnum. As the review application was filed before the Appellate Tribunal after expiry of the limitation that was prescribed, the Hon'ble Supreme Court has held that there was no due diligence on the part of the respondent for bringing in the applicability of the proposition laid down in Suryachakra Power Corporation Limited in assistance of the appellant. 42. In Glaxo Smith Kline Consumer Health Care Limited, the decisions in ONGC, M.P. Steel Corporation and Suryachakra Power Corporation Limited have been referred to and found no applicability of the provision of Section 14 of the Limitation Act as the appellant was found wanting on due diligence in the given facts and circumstances of the case. 43. In all the cases of Consolidated Engineering Enter....
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....g in the concerned case. Therefore, it is in the light of the above principles, the case of the petitioner herein is to be examined on the two aspects, firstly, whether the petitioner exercised due diligence in pursuing the prior proceeding; and secondly, whether such prior proceeding was pursued in good faith. 45. Reverting back to Section 161 of the CGST Act, it is found that for an affected person the time period provided by Section 161 of the CGST Act for filing a Rectification Application before the Adjudicating Authority is three months from the date of issue of the decision or order whereby, he has found himself aggrieved. In the case in hand, the Order-in-Original was passed on 03.01.2025 and the Rectification Application was filed well within the period of three months on 08.03.2025. Therefore, it cannot be said that there was no due diligence, or negligence, or inaction, on the part of the petitioner in filing the Rectification Application, which is the prior proceeding pursued relating to the same matter. 46. Section 14 further requires that the prior proceeding should have been prosecuted in good faith. The definition of 'good faith' is provided in Section 2[h] of....
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....r or even subsequent to the order passed, it can be said to be 'mistake apparent from the record' and can be corrected on the basis of the well settled proposition that a judicial decision operates retrospectively. 49. The collection of information by the petitioner on the aspect that the allegedly erring supplier filed GSTR-1 in April, 2021 for the period of March, 2021 before the cut-off date of September, 2021 go to demonstrate further that prima facie there was absence of the elements of lack of due care and attention in the petitioner in pursuing the Rectification Application. In other words, it cannot be said that the petitioner was not pursuing the Rectification Application in good faith. It is pertinent to mention that this Court has examined the above point urged on behalf of the petitioner only from the standpoint whether the petitioner pursued the prior rectification proceeding in good faith or not. It is made clear that this Court is not examining the issue whether the Adjudicating Authority ought to have rectified the Order-in-Original or not, as the legality and validity of only the Order-in-Appeal dated 19.02.2026 only which has not merged with either the Order-in....
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....that merely for the reason that the petitioner as an appellant did not file any separate application along with the appeal, which was presented with delay, explaining the reasons for late presentation of the appeal, the petitioner should not be deprived of atleast one opportunity to explain the reasons why the appeal could not be presented within the normal period of limitation of three months and the same had to be presented beyond such normal period of limitation but within the extended period of limitation. 54. Order XLI of the Code of Civil Procedure, 1908 has provided for Appeals from Original Decrees. Sub-rule [1] of Rule 3A of Order XLI, CPC has prescribed that when an appeal is presented after the expiry of the period of limitation specified therefore, it shall be accompanied by an application supported by affidavit setting forth the facts on which the appellant relies to satisfy the Court that he had sufficient cause for not preferring the appeal within such period. 54.1. In this connection, the decision of the Hon'ble Supreme Court in State of Madhya Pradesh and another vs. Pradeep Kumar and another, [2000] 7 SCC 372, can be referred to. 54.2. In the context of s....
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....application is filed subsequently the appeal can be treated as presented in accordance with the requirement contained in Rule 3-A Order 41 of the Code. 20. In the result we allow this appeal and set aside the impugned judgment. The matter shall now go back to the High Court for disposal of the application to condone the delay in filing the second appeal. If the explanation was found satisfactory to the High Court the second appeal will have to be disposed of in accordance with law. This appeal is disposed of accordingly. 55. The procedure in appeal has been delineated in Section 107[8] of the CGST Act. As per sub-section [8] of Section 107, the Appellate Authority shall give an opportunity to the appellant to be heard. It is inherent in the prescription of Section 107[8] for the Appellate Authority to provide a reasonable opportunity to an appellant. This Court is of the considered view that the same principle, as outlined in Pradeep Kumar [supra], is applicable on all fours in case of appeals of the present nature presented. In other words, if an appeal is presented beyond the normal period of three months but within a further period of one month without providing any ....