HC Permits Time-Barred Appeal, Citing Denial of Hearing and Natural Justice Violation.

HC Permits Time-Barred Appeal, Citing Denial of Hearing and Natural Justice Violation.

Issue

Can a taxpayer, who was denied a personal hearing before the passing of an adverse Order-in-Original and subsequently missed the statutory appeal deadline, be granted an opportunity by a High Court in a writ petition to file the appeal beyond the limitation period?

Facts

• The petitioner was issued a Show Cause Notice (SCN) alleging fraudulent availment of Input Tax Credit (ITC) worth approximately ₹11.19 crores.
• The petitioner had already deposited ₹3.94 crores with the department during the proceedings.
• The adjudicating authority denied the petitioner’s request for an adjournment and passed an adverse Order-in-Original on February 4, 2025, without granting a personal hearing.
• The order was allegedly uploaded to the GST portal in an illegible, compressed format, making it difficult to download and read.
• The petitioner failed to file a statutory appeal under Section 107 within the prescribed time limit.
• Consequently, the petitioner filed a writ petition before the High Court, seeking relief against the order on the grounds of violation of natural justice.

Decision

• The High Court, while noting that the limitation period for an appeal had expired, exercised its writ jurisdiction to provide a remedy due to the clear violation of natural justice.
• It disposed of the writ petition by permitting the petitioner to avail the appellate remedy under Section 107, despite the delay.
• The court set a new deadline, directing that the appeal must be filed by November 30, 2025.
• It was explicitly ordered that if the appeal is filed within this extended timeframe, it must be adjudicated on its merits and not be dismissed as time-barred.
• The court further directed that the ₹3.94 crores already deposited by the petitioner be adjusted towards the mandatory statutory pre-deposit required for the appeal.
• The tax authorities were instructed to provide a clear, legible copy of the original order to the petitioner within one week.

Key Takeaways

• Natural Justice is Paramount: A violation of the principles of natural justice, such as denying a personal hearing, is a strong ground for a High Court to intervene in its writ jurisdiction.
• Writ Court Can Revive Remedies: Even if a statutory remedy like an appeal becomes time-barred, a High Court can use its extraordinary powers under Article 226 to create a pathway for the taxpayer to access that remedy, ensuring justice is served.
• Balancing Act: The court balanced the need for adherence to statutory timelines with the imperative of providing a fair hearing. It did not quash the order but revived the taxpayer’s right to challenge it on merits.
• Practical and Equitable Relief: The court provided practical relief by ordering the supply of a clear order copy and allowing the adjustment of the amount already paid towards the pre-deposit, demonstrating a holistic and equitable approach.