Gujarat High Court Clarifies Limitation Period for GST Appeals Runs from Date of Rectification Order Rejection

In a significant ruling, the Gujarat High Court addressed the computation of limitation for filing appeals under Section 107 of the Goods and Services Tax Act, 2017 (GST Act). The Court clarified that the limitation period for filing an appeal begins from the date of rejection of a rectification application, rather than from the date of the original order.

The petitioner had challenged an order dated 25.04.2025, by which the appellate authority rejected the appeal as time-barred. The original order was passed on 12.08.2024, and the petitioner subsequently filed a rectification application on 05.11.2024 under Section 161 of the GST Act. This rectification application was rejected on 19.03.2025. The petitioner then filed an appeal on 25.03.2025, explaining in the appeal form that the limitation period should be computed from the date of rejection of the rectification application.

The appellate authority, however, rejected the appeal on the ground that it was filed beyond the statutory period of 120 days from the date of the original order, holding that it had no power to condone the delay beyond this period.

The High Court, after considering the submissions, observed that while the appellate authority indeed lacks the power to condone delay beyond 120 days, it failed to consider that the limitation period should be reckoned from the date of rejection of the rectification application. The Court emphasized that the filing and disposal of the rectification application is a vital aspect that directly impacts the calculation of the limitation period under Section 107 of the GST Act.

Accordingly, the Court quashed the impugned order and remanded the matter to the appellate authority for fresh consideration, directing it to examine the details provided by the petitioner and to pass a reasoned order after granting an opportunity of hearing.

This decision reinforces the principle that the limitation period for filing an appeal under the GST Act is to be computed from the date of rejection of a rectification application, ensuring that appellants are not prejudiced by the time taken in the rectification process.