TaxTMI 
TaxTMI 
2026 (8) TMI 1391
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....hik Sundaram For the Petitioner in WP.No.16914 of 2026 : Mr.TR.Ramesh For the Petitioner in WP.No.21252 of 2026: Mr.Siddharth Sivakumar M.Harri Viswanaath For the Petitioner in WP.Nos.22164,22166, 22172, 22167,22174 & 22177 of 2026 : Mr.Raghav Rajeev For the Petitioner in WP.Nos.22249, 22269, 22257 of 2026 :M/s.Harish Bindumadhavan Disha Jain, M.Rayyan For the Petitioner in WP.No.23235 of 2026 : Ms.Sanchita S. for Mr.Sivaraman R. For the Petitioner in WP.Nos.23701 & 23719 of 2026 : Mr.P.Bhagavath, Samriddhi S For the Petitioner in W.P.No.27239/2026 : Mr.Adithya Reddy For the Petitioner in W.P.No.23980/2026 : Ms.Disha Jain For the Respondents in W.P.Nos.2629, 22164, 22166, 22167, 22172, 22174, 22177 & 23235 of 2026 : Ms.G.Dhana Madhri Govt. Advocate (Tax) For the Respondents in W.P.Nos.16914, 21252, 22249, 22269, 22257, 23719 & 23980 of 2026 :Ms.Amirta Dinakaran, Govt. Counsel (T) For the Respondents in W.P.Nos.23701 & 27239 of 2026 : Mr.R.Sethu Prabakaran Govt. Counsel (T) COMMON ORDER The principal question that falls for consideration in this batch of cases is whether the time spent in prosecuting a rectification petition is liable to be exc....
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....hey are relevant for the limited purpose of assessing the conduct of the party and should not be taken as the primary consideration. (ix) In some cases, the order in the rectification petition was issued much beyond the period of limitation for filing an appeal although the rectification petition was filed within a reasonable time from the date of the corresponding original order. As a consequence, unless the benefit of the principles underlying Section 14 is extended, the taxable person is left without remedy. 5. In support of these contentions, the following judgments were relied on: (a) Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi (1975) 4 SCC 628 (Roshanlal Kuthalia) (b)Kunhayammed v. State of Kerala, (2000) 6 SCC 359 (c)Union of India v. West Coast Paper Mills (2004) 3 SCC 458 (d)CCE v. Bharat Bijlee Limited 2006 (198) ELT 489 (SC) (e) Consolidated Engineering Enterprises v. Principal Secretary (2008) 7 SCC 169 (Consolidated Engineering Enterprises) (f) M.P. Steel Corporation v. Commissioner of Central Excise (2015) 7 SCC 58 (M.P.Steel Corporation) (g) Suryachakra Power Corporation Limited v. Electrici....
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....apply to cases wherein the authority was unable to entertain the matter. (vi) Under Section 161, the proper officer is empowered to receive and dispose of a rectification petition by examining whether there is an error apparent. Consequently, it cannot be said that said officer was unable to entertain the rectification petition. (vii) The judgment of the Supreme Court in M.P.Steel Corporation did not deal with a rectification petition. It was a case relating to genuine legal ambiguity about the authority who had the power of adjudication. (viii) A decision rejecting a rectification petition on merits by concluding that there is no error apparent is not similar to a case of defect of jurisdiction and it cannot be construed as an aborted proceeding. (ix) GST statutes expressly provide for exclusion periods. Illustratively, reference may be made to sub-sections (1) and (11) of Section 75, Section 76(7), Section 107(13) and Section 108 (4) and (5). If Parliament intended to provide for an exclusion if a rectification petition were to be filed, express provision would have been made. Hence, there is an implied exclusion of principles underlyi....
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....essarily orally) of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal argument by the parties, and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and an application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law. A quasi-judicial decision equally presupposes an existing dispute between two or more parties and involves (1) and (2), but does not necessarily involve (3) and never involves (4). The place of (4) is in fact taken by administrative action, the character of which is determined by the Minister's free choice." (Cooper case, KB pp. 340-41)" 9. A similar conclusion was reached in paragraph 51 of The Property Company. Thus, the Supreme Court has held categorically that the Limitation Act applies to courts but not to quasi-judicial bodies. The matter, however, does not r....
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.... provisions makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning the delay only up to 30 days after expiry of 60 days which is the preliminary limitation period for preferring an appeal. In the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act...." 12. In The Property Company, the Supreme Court placed the matter beyond all doubt by holding, in relevant part, as under: "92. However, suppose the concerned provision already provides that delay can only be condoned within a maximum outer-limit, then such an outer-limit would have to be harmoniously read with the expression "as far as may be" to curtail the power to exercise discretion in condoning delay within that outer-limit" Therefore, there is no doubt that an application to condone delay under Section 5 of the Limitation Act or the principles underlying said provision is not maintainable before the appellate authority. When does the limitation clock start ticking? 13. One or more of the parties also contended that the period of limitation....
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....ion that even where Section 14 may not apply, the principles on which Section 14 is based, being principles which advance the cause of justice, would nevertheless apply. We must never forget, as stated in Bhudan Singh v. Nabi Bux that justice and reason is at the heart of all legislation by Parliament. This was put in very felicitous terms by Hegde, J. as follows: (SCC p. 485, para 9) "9. Before considering the meaning of the word 'held' in Section 9, it is necessary to mention that it is proper to assume that the lawmakers who are the representatives of the people enact laws which the society considers as honest, fair and equitable. The object of every legislation is to advance public welfare. In other words as observed by Crawford in his book on 'Statutory Constructions' that the entire legislative process is influenced by considerations of justice and reason. Justice and reason constitute the great general legislative intent in every piece of legislation. Consequently where the suggested construction operates harshly, ridiculously or in any other manner contrary to prevailing conceptions of justice and reason, in most instances, it would seem that the ....
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....tion Act per se may not be applicable, but, as indicated hereinbefore, the principles thereof would be applicable for the purpose of condonation of delay in terms of Section 5 thereof." 40. The Court further quoted from Consolidated Engg. Enterprises an instructive passage: (Iric Sohan case, SCC p. 183, para 21) "21.In Consolidated Engg. Enterprises v. Irrigation Deptt. This Court held: (SCC p. 181, para 22) '22.The policy of the section is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the le....
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....in sixty days from the date of the communication to him of such decision or order: Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days." 18. Sub-section (1) of Section 128 of the Customs Act prescribes the period of limitation of 60 days from the date of communication of the relevant decision or order. The proviso thereto enables condoning for sufficient cause if the appeal were to be presented within a further period of 30 days. Comparing this provision with sub-sections (1) and (3) of Section 107, instead of the 60 day time limit specified in Section 128(1), a three month period is specified in sub-section (1) of Section 107. Just as in the case of the proviso to Section 128(1) of the Customs Act, sub-section (4) of Section 107 also enables the appellate authority to condone delay of a further period of one month (as against 30 days in the other statute). Thus, Section 128 of the Customs Act is substantially similar to Section 107 of the applicable GST laws. To that exten....
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....tion Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation. In other words, the applicability of the provisions of the Limitation Act, therefore, to be judged not from the terms of the Limitation Act but by the provisions of the Central Excise Act relating to filing of reference application to the High Court. The scheme of the Central Excise Act, 1944 support the conclusion that the time limit prescribed under Section 35H(1) to make a reference to High Court is absolute and unextendable by court under Section 5 of the Limitation Act. It is well settled law that it is the duty of the court to respect the legislative intent and by giving liberal interpretation, limitation cannot be extended by invoking the provisions of Section 5 of the Act." 20. All the exclusion provisions relied on by the revenue relate to the exclusion of the period during which the service of notice or issuance of an order is stayed by the court or appellate tribunal. These provisions are included in sections relating to both original ....
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....t, reads as under: "14. Exclusion of time of proceeding bona fide in Court without jurisdiction.- (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a Court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it." (emphasis added) 24. While construing Section 14, it bears repetition that the Limitation Act per se does not apply to proceedings before quasi-judicial bodies and that the ex....
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....al strictly so called but others more or less neighbours to such deficiencies. Any circumstance legal or factual, which inhibits entertainment or consideration by the Court of the dispute on the merits, comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right (see (1971)2 SCR 397 at 401). In the Associated Hotels case (i.e. the very lis in its earlier round on the execution side) this Court pointed out [1961] 1 SCR 259 at 272) that the question was one of initial jurisdiction of the Court to entertain the proceedings. Thus in this very matter, the obstacle was jurisdictional and the exclusionary operation of s. 14 of the Limitation Act was attracted." 27. Even assuming without admitting that the principles underlying Section 14 are applicable to proceedings before the appellate authority and that said principles extend beyond jurisdictional defects, the respondents contended that said principles cannot be extended to a rectification petition, which falls within a statutory silo. In support of this contention, reliance was placed on the non obstante clause in Section 161. It was....
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.... I record this conclusion because the second proviso prescribes that the period of limitation of six months for making a rectification does not apply to the correction of a clerical or arithmetical error. This indicates that the power of rectification extends beyond the correction of clerical or arithmetical errors and such power may be exercised in relation to errors which are patent or apparent on the face of record. The scope of inquiry is, however, confined to verifying whether the earlier decision contains an evident error. This exercise is undertaken by looking at the material on record, and the entire field is not open unlike in a first appeal. Indeed, it cannot even be equated to a review where, in certain circumstances, new material may be considered. 30. Given the limited scope, even if a prima facie case of a latent error were to be shown by the applicant, the rectification would be liable to be rejected. Illustratively, input tax credit may have been denied for lack of evidence of movement of goods. The rectification petitioner may endeavour to place on record necessary documents, but the application may be rejected on the ground that new material will not be receive....
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....d as a definition that captures the content of good faith exhaustively. It also bears repetition that the Limitation Act does not apply to proceedings before quasi-judicial bodies and the examination is limited to ascertaining whether the principles underlying the statute will apply. 33. It was previously concluded that the expression "other cause of a like nature" is not confined to defects of jurisdiction or even defects falling within the same category. As contended by learned Government Counsel, the GST statutes empower an officer who passes an order to rectify such order in accordance with Section 161. Therefore, the rejection of a rectification petition is a decision on the merits of the rectification petition, although it is not a decision on the merits of the larger dispute. In those circumstances, if a party is permitted to avail of the benefit of exclusion merely by lodging a rectification petition, irrespective of whether there is some basis to lodge such petition, there is scope for rampant abuse. In other words, although a limitation period of three months is prescribed for filing an appeal, it would then become possible for a person aggrieved by an order to first l....
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....explanation (c) which deems misjoinder of parties or a cause of action to be a cause of a like nature with defect of jurisdiction, expands the scope of the section. We have already noticed that the India Electric Works Ltd. judgment has held that strictly speaking misjoinder of parties or of causes of action can hardly be regarded as a defect of jurisdiction or something similar to it. Therefore properly construed, explanation (a) also confers a benefit and does not by a side wind seek to take away any other benefit that a purposive reading of Section 14 might give. We, therefore, agree with the decision of the Madhya Pradesh High Court that the period from the cause of action till the institution of appellate or revisional proceedings from original proceedings which prove to be abortive are also liable to exclusion under the Section. The view of the Andhra Pradesh High Court is too broadly stated. The period prior to institution of the initiation of any abortive proceeding cannot be excluded for the simple reason that Section 14 does not enable a litigant to get a benefit beyond what is contemplated by the Section - that is to put the litigant in the same position as if the aborti....
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....derlying Section 14 is required to fulfil all the requirements specified in the said provision, including the requirement of prosecution with due diligence and in good faith. (vii) The expression "good faith" entails a broad examination of the rectification petition to determine whether there was some basis to file such rectification petition. This requirement would avert an abuse of process. Individual cases 38. It is common ground between the parties to these proceedings that both the prior and subsequent proceedings were prosecuted by the same party. While there is a minor quibble as to whether both proceedings relate to the same issue, this too is largely admitted. It is, therefore, necessary to turn to the facts of individual cases so as to examine whether the requirements of good faith and due diligence are satisfied. 39. Six cases in this batch were filed by Salem RR Catering Service. In all these cases, orders-in-original were issued ex parte and rectification petitions were filed thereafter. Out of these six cases, in W.P.No.22167 of 2026, learned counsel for the petitioner pointed out that the error apparent is discernible merely on examining the order i....
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.... and 16914 of 2026 patent errors were pointed out in the rectification petitions and said contentions were not addressed in the orders rejecting the rectification application. In these cases, the petitioner concerned is entitled to exclusion of time. The details of these cases are captured in the table below: WP No. Petitioner Respondent/ 1st Respondent Date of Order-in- Original Date of Rectification Application Date of Rectification Order Date of Preferring of Appeal Date of Dismissal of Appeal Reason for Dismissal of Appeal Grounds for rectification Reason for Rejection of Rectification Application 21252 of 2026 KYB Motorcycle Suspension India Limited Commissioner of State Tax 27.02.2025 26.03.2025 06.11.2025 24.12.2025 30.01.2026 Delay in submission of appeal Ineligible ITC, which was disclosed separately, was erroneously deducted again from the ITC claimed under GSTR-3B. ITC on imports pertaining to FY 19-20 was taken in FY 2021. The ground has not been specifically addressed. General law regarding rectification was spelled out and the application....
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....the date of receipt of a copy of this order, the impugned order is set aside partly only insofar as this defect is concerned and the matter is remanded for reconsideration. After providing a reasonable opportunity to the petitioner, a fresh order shall be issued within three months from the date of remittance of 25% of the disputed tax demand. 44. In W.P.No.23980 of 2026 filed by Cinepolis India Private Limited, two grounds were raised by learned counsel. The first ground was nonconsideration of credit notes and the second ground was the imposition of GST on food and beverages at 18% instead of 5% in the factual context of 5% being accepted by the proper officer in relation to other assessment periods. I am satisfied that there was some basis to lodge the rectification petition in this case. Therefore, the petitioner is entitled to exclusion of time. 45. In W.P.No.2629 of 2026, which was filed by E2E Supply Chain Solutions Limited, the primary ground raised in the rectification petition was non-consideration of credit notes submitted prior to the order in original. The petitioner had relied on an earlier order of this Court in SPK and Co. while lodging the appeal. Considering....