GST Appeal Cannot be Rejected Without Considering Delay Explanation: Allahabad HC Sets Aside Order [Read Order]

The Allahabad High Court held that a GST appeal cannot be rejected without considering the explanation for delay and set aside the appellate order which dismissed the appeal only on limitation without examining the reasons given by the assessee.

E3 Edgeband Industries Pvt. Ltd., the petitioner, is a registered dealer engaged in supply of goods such as aluminum cable and PVC strips. The petitioner had supplied goods to J.S.S. Distributors, who later returned certain goods along with tax invoice and e-way bill. During transit, the vehicle carrying the goods was intercepted by the authorities and proceedings were initiated under the GST Act.

The goods were seized and a penalty of Rs. 2,42,888 was imposed under Section 129 which the petitioner deposited under protest.

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The petitioner filed an appeal against the penalty order. The appeal was required to be filed within 90 days with an additional condonable period of 30 days. The last date for filing the appeal was 15.09.2024, but the appeal was filed on 27.09.2024. The appellate authority rejected the appeal on the ground that it was filed beyond the prescribed period and was not maintainable.

The petitioner’s counsel argued that the delay occurred because the documents were handed over to the accountant and then to the Chartered Accountant, but the CA failed to file the appeal due to misunderstanding regarding the date.

The counsel also argued that the petitioner was unwell during the relevant period and the delay was minimal. They submitted that the appellate authority did not consider these grounds at all while rejecting the appeal.

The State’s counsel argued that the petitioner was not vigilant in filing the appeal within time. However, it was also submitted that the matter can be remitted back to the appellate authority for fresh consideration.

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Justice Vikas Budhwar observed that the petitioner had clearly given reasons for the delay in filing the appeal. The court observed that the appellate authority failed to consider the contentions and explanation given by the petitioner regarding the delay. It pointed out that when grounds for condonation are raised, the authority is required to examine them before passing an order.

The court explained that rejection of the appeal without considering the explanation makes the order unsustainable in law. In view of the facts, the court set aside the appellate order and remanded the matter back to the appellate authority to pass a fresh order in accordance with law after giving opportunity to the petitioner. The authority was directed to decide the matter within two months.

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