In a recent ruling, the Delhi High Court ruled that the statutory timeline for filing an appeal, as provided under Section 107(1) and the additional one-month condonable period under Section 107(4), is absolute and cannot be extended.
The case involved multiple businesses, including Addichem Speciality LLP, JM Fleet Management Pvt Ltd, and Enia Architects, among others. The dispute arose when these petitioners failed to file appeals within the prescribed three-month period, along with an additional one-month condonable period allowed under Section 107(4) of the CGST Act.
The petitioners’ counsel argued that exceptional circumstances such as pandemic-related disruptions, loss of important personnel, and lockdowns prevented them from filing timely appeals. The petitioners’ counsel also argued that the retrospective cancellation of GST registration adversely impacted prior transactions and led to unjustified tax demands on buyers.
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The counsel claimed that the rejection of appeals solely on limitation grounds violated principles of natural justice because many of them had already submitted responses to the show cause notices (SCNs).
The GST department’s counsel countered that the CGST Act prescribes a strict limitation period, allowing only a one-month extension beyond the statutory three-month appeal period. The department’s counsel argued that the Appellate Authority has no jurisdiction to condone any delay beyond this additional period.
The department counsel relied on the Supreme Court’s ruling in Singh Enterprises v. Commissioner of Central Excise (2008) and Commissioner of Customs and Central Excise v. Hongo India Pvt. Ltd. (2009), which held that tax laws require strict adherence to limitation periods.
A bench led by Justice Yashwant Varma and Justice Dharmesh Sharma ruled that courts cannot override statutory limitation periods under Section 107 of the CGST Act. The court referenced the Supreme Court rulings and ruled that taxation laws must be strictly interpreted and that allowing extensions beyond statutory limits would create uncertainty in tax administration.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The court held that the appeals were filed beyond the prescribed limitation period, so the Appellate Authority was correct in rejecting them. The court also held that the High Court’s extraordinary jurisdiction under Article 226 could not be used to extend statutory time limits and that strict adherence to tax laws is necessary to maintain compliance and administrative efficiency.
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