Gujarat High Court Clarifies Appellate Authority’s Discretion to Condon Delay in GST Appeals Filed Within Statutory Extension Period

The Gujarat High Court, in its decision dated 16 January 2026, addressed the scope of the appellate authority’s discretion to condone delays in filing appeals under Section 107(4) of the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner, a partnership firm engaged in the manufacture and sale of chemicals, challenged the rejection of its appeal against a tax demand order on the ground of delay.

The dispute arose after the petitioner was served with an order-in-original dated 9 January 2024, which determined a tax demand of Rs. 8,12,967/- (comprising IGST, CGST, and SGST) along with interest and penalty, for allegedly availing inadmissible input tax credit (ITC) on post-supply discounts. The petitioner accepted most audit objections but contested the ITC reversal related to post-supply discounts, arguing that the discounts were received without GST in accordance with Section 34 of the CGST Act. Despite submitting a detailed reply, the adjudicating authority passed the order without considering the petitioner’s submissions.

Upon receiving the order, the petitioner attempted to file an appeal. However, due to the closure and sale of its business premises, the order sent by post was returned undelivered. The petitioner was later informed telephonically by the GST Department to collect the order, which was then collected by the company’s accountant. The petitioner subsequently filed a manual appeal within the additional statutory period, but the appellate authority rejected the appeal solely on the ground of a 13-day delay beyond the initial 90-day period prescribed under Section 107(1) of the CGST Act.

In its analysis, the High Court emphasized that Section 107(4) of the CGST Act grants the appellate authority discretion to allow an additional one month for filing an appeal if ‘sufficient cause’ is demonstrated. The Court observed that the reasons advanced by the petitioner—closure of business, non-receipt of the order at the registered address, and subsequent manual filing—constituted ‘sufficient cause’ within the meaning of the statute. The Court further clarified that the appellate authority is required to apply its mind to the reasons for delay and cannot reject an appeal solely on technical grounds if the delay falls within the permissible extended period.

The Court also found the appellate authority’s objection to the manual filing of the appeal to be unreasonable, noting that it is within the authority’s power to entertain and decide appeals filed manually, especially when technical issues with the GST portal prevent electronic filing.

Accordingly, the High Court quashed the impugned orders, including the original tax demand, the summary order in Form DRC-07, and the appellate order rejecting the appeal. The matter was remanded to the appellate authority for fresh consideration on merits, with a direction that the petitioner must cooperate fully with the proceedings. The Court made the rule absolute and did not award costs.

This judgment clarifies that appellate authorities under the CGST Act must exercise their statutory discretion to condone delays in appeal filings when justified by sufficient cause and when the appeal is filed within the additional period allowed by law.