Gujarat High Court Rules High Court Cannot Condon Delay Beyond Statutory Limit for GST Appeals Under Section 107

In a significant judgment, the Gujarat High Court has clarified the scope of its powers under Article 226 of the Constitution in relation to condoning delays in filing appeals under Section 107 of the Central Goods and Services Tax (CGST) and Gujarat Goods and Services Tax (GGST) Acts, 2017. The case arose from the cancellation of GST registration of a proprietorship firm engaged in manufacturing cake boxes and wooden cake bases, following non-filing of returns due to alleged professional negligence by the petitioner’s tax consultant. The petitioner challenged the show-cause notice, the cancellation order, and the appellate order, arguing violation of natural justice and seeking restoration of registration.

The petitioner contended that the show-cause notice and cancellation order were void ab initio, having been issued without a meaningful opportunity of hearing, and that the appellate authority failed to consider relevant precedent. The petitioner also argued readiness to comply with all tax obligations if registration was restored.

The State, however, argued that the appellate order should not be set aside, especially since the petitioner failed to appear before the appellate authority.

The Court’s analysis focused on the statutory limitation period for filing appeals under Section 107 of the Act. The provision allows an appeal to be filed within three months from the date of communication of the order, with a further discretionary extension of one month if sufficient cause is shown, making the maximum permissible period 120 days. The Court noted that the petitioner filed the appeal after a delay of approximately one and a half years, far exceeding the statutory limit.

Relying on Supreme Court precedents, including Assistant Commissioner (CT) LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Limited and Oil and Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Limited, the High Court emphasized that statutory limitation periods in special legislation are binding and cannot be extended by invoking Section 5 of the Limitation Act or by exercising writ jurisdiction under Article 226. The Court observed that while Article 226 confers wide powers, these cannot be exercised in a manner that renders statutory provisions otiose or inconsistent with legislative intent.

The judgment further clarified that even if a petitioner has valid reasons for delay, the High Court cannot condone delays beyond the maximum period prescribed by statute. The Court also noted that the petitioner, having availed the statutory remedy of appeal and failed to appear before the appellate authority, could not subsequently challenge the validity of the show-cause notice or cancellation order in writ proceedings.

Ultimately, the Gujarat High Court dismissed the writ petition, holding that it had no jurisdiction to condone the delay beyond the statutory period prescribed under Section 107 of the CGST/GGST Act. The Court reiterated the importance of strict adherence to limitation periods in tax statutes and the limited scope of judicial intervention in such matters. The rule was discharged with no order as to costs.