High Court condones appeal delay due to natural justice violation despite statutory bar

High Court condones appeal delay due to natural justice violation despite statutory bar

Issue

Whether the High Court can exercise writ jurisdiction to condone a delay in filing a statutory appeal beyond the condonable period when the Appellate Authority dismissed the appeal without a fair hearing (short notice), despite the Appellate Authority lacking the statutory power to condone such delay.

Facts

• Tax Demand: An Order-in-Original confirmed tax, interest, and penalty against the petitioner due to discrepancies between GSTR-3B and GSTR-2A, and GSTR-1 and GSTR-3B.

• Delayed Filing: The petitioner filed an appeal under Section 107 of the CGST Act after the expiry of the statutory limitation period.

• Reason for Delay: A plea for condonation of delay was submitted, citing the illness of the petitioner’s counsel as the “sufficient cause.”

• Procedural Violation: The Appellate Authority issued a notice for a personal hearing but provided only one day’s notice to the petitioner.

• Dismissal: Due to the extremely short notice, the petitioner could not appear. The Appellate Authority dismissed the appeal solely as time-barred without hearing the merits.

• Writ Challenge: The petitioner filed a writ petition arguing that the dismissal violated principles of natural justice and sought a hearing on merits.

Decision

• Limits of Appellate Authority: The Court noted that under the GST Act, the Appellate Authority has no statutory power to condone delay beyond the prescribed extended period (typically one month after the three-month deadline).

• Writ Jurisdiction for Natural Justice: However, the Court held that it could exercise its extraordinary jurisdiction under Article 226 because the one-day notice for the hearing constituted a clear infraction of the principles of natural justice.

• Sufficient Cause Accepted: The illness of the counsel was accepted as a valid reason preventing timely filing.

• Conditional Relief: The delay was condoned subject to the petitioner paying costs of Rs. 20,000 within two weeks.

• Remand Directions: The impugned Order-in-Appeal was set aside. The Appellate Authority was directed to hear the appeal on merits after providing a proper notice of at least one week to the petitioner.

Key Takeaways

Natural Justice Prevails: Even if an appeal is statutorily time-barred, High Courts may intervene if the tax authorities fail to provide a fair opportunity to be heard (e.g., giving only 24 hours’ notice).

Statutory vs. Constitutional Power: While GST authorities are bound by the strict limitation periods of Section 107, High Courts can use Article 226 to condone delays to prevent a miscarriage of justice in exceptional cases.

Adequate Notice Mandatory: A “personal hearing” is a statutory right under Section 75(4), and it must be meaningful. Providing insufficient notice renders the proceedings liable to be quashed.

Would you like me to draft a template for a ‘Condonation of Delay’ affidavit citing medical grounds for your future reference?