Appeal restored despite delay; Illness and Business Closure accepted as valid reasons

Issue

Whether the High Court can condone a delay in filing a GST appeal beyond the statutory limitation period when the assessee failed to participate in the adjudication proceedings due to the severe illness of the authorized signatory and the prior closure of the business.

Facts

Ex-Parte Order: The Department issued a Show Cause Notice (SCN) and subsequently passed an adjudication order. The proceedings were conducted ex parte (without the assessee’s presence) because the assessee failed to file a reply or appear.
Reason for Non-Appearance: The assessee contended that they could not participate because:
1. The authorized signatory was seriously unwell during the relevant period.
2. The business had already closed down much before the SCN was issued, leading to a disconnect in receiving/responding to notices.
The Delay: Consequently, the appeal against the adjudication order was not filed within the statutory limitation period (usually 3 months + 1 month condonable by Appellate Authority).
Relief Sought: The assessee approached the High Court under Article 226, seeking permission to file the appeal despite the delay to contest the tax demand.

Decision

Opportunity to Contest: The High Court held that since the original adjudication was ex parte and the assessee had valid reasons (illness/closure) for not participating, they should not be left without a legal remedy. Justice demands that the assessee be afforded a chance to contest the validity of the order on its merits.
Conditions for Restoration: The Court allowed the assessee to file the appeal before the Appellate Authority, subject to two conditions:
1. Payment of Costs: A monetary cost (to be determined) must be paid for the procedural delay.
2. Statutory Pre-deposit: The assessee must make the mandatory pre-deposit (usually 10% of the disputed tax) as required under Section 107(6).
Outcome: The Writ Petition was allowed in favor of the assessee.

Key Takeaways

Article 226 Override: While the Appellate Authority (Commissioner Appeals) has limited power to condone delay (max 1 month beyond the 3-month limit), the High Court has wider powers under Article 226 to condone longer delays if “sufficient cause” is shown.
Medical Grounds: Severe illness of the key decision-maker is consistently accepted by Courts as a strong ground for condonation.
Ex-Parte Orders: Courts are generally lenient in restoring appeals against ex parte orders because the fundamental principle of natural justice (right to be heard) was not exercised at the first stage.

HIGH COURT OF CALCUTTA

RSSG-OT (JV)

Union of India^*

Om Narayan Rai, J.

WPA No. 12113 of 2025

DECEMBER 16, 2025

Rahul Tangui and Ms. Taniya Roy for the Petitioner. Kaushik Dey, Ms. Ekta Sinha, Soumen Bhattacharjee, Ankan Das, Ms. Shradhya Ghosh, Nilotpal Chatterjee, Tanoy Chakraborty and Saptak Sanyal for the Respondent.

ORDER

1. This writ petition takes exception to an adjudication order dated August 27, 2024 passed by the proper officer under Section 73 of the WBGST Act, 2017 / CGST Act, 2017 (hereafter ‘the said Act of 2017’).

2. Learned advocate appearing for the petitioners submits that although the order impugned is appealable in nature, the petitioners could not prefer appeal in time inasmuch as the authorized signatory of the petitioner no. 1 was seriously unwell and the business of the petitioner no. 1 also got closed much prior to the time when the notice to show-cause was issued.

3. It is further submitted that the petitioners’ authorized signatory remained under treatment from July 25, 2023 to April 29, 2025 and as such the petitioners could neither file appeal before the appellate authority nor approach this Court earlier.

4. It is submitted that the petitioners have good case on merits inasmuch as there are documents which would show that there is no tax due and payable by the petitioners in respect of the relevant financial year and if such documents are produced, the respondent GST authorities would definitely be satisfied as regards the petitioners’ case.

5. Heard learned advocates appearing for the respective parties and considered the material on record.

6. It is evident that the petitioners have not been able to participate in the adjudication proceedings and has not filed any reply to the notice to show-cause by reason whereof the said proceedings were conducted and concluded ex parte. If the petitioners are not given one opportunity to challenge the adjudication order before the appellate authority, the petitioners would be losing one important forum of appeal.

7. In such view of the matter, this Court is of the view that the petitioners should be afforded a chance to contest the validity of the adjudication order impugned herein. However, since explanation furnished by the petitioners is not fully satisfactory, this Court is of the view that the petitioners should be put on terms. Accordingly, it is directed that if the petitioners pay costs to the tune of Rs.20,000/- to the State Legal Services Authority within four weeks from date and file appeal before the appellate authority within the same period of four weeks from date upon furnishing proof of such payment of costs to the appellate authority then the petitioners’ appeal shall be entertained by the appellate authority.

8. It is however clarified that the petitioners shall remain obliged to comply with the statutory formality of pre deposit in terms of Section 107(6) of the said Act of 2017 while preferring the appeal. If such appeal is filed upon payment of costs as aforesaid and upon making the statutory pre deposit, the appeal shall be heard by the appellate authority on merits and decided in accordance with law without raising any objection as regards delay in filing the appeal.

9. Needless to mention that this Court has not gone into the merits of the petitioners’ case and all points are left open to be decided by the appellate authority in accordance with law.

10. WPA 12113 of 2025 stands disposed of on the above terms.

11. Urgent photostat certified copy of this order, if applied for, be supplied to the parties on urgent basis after completion of necessary formalities.