Supreme Court Issues Notice on Dismissal of Appeal Beyond Section 107(4) Outer Condonation Limit

Supreme Court Issues Notice on Dismissal of Appeal Beyond Section 107(4) Outer Condonation Limit

Supreme Court Issues Notice on Dismissal of Appeal Beyond Section 107(4) Outer Condonation Limit

Issue

Whether the Appellate Authority and High Court were justified in rejecting an appeal for delay beyond the maximum condonable period under Section 107(4), where the limitation period was reckoned from the date of electronic communication of the order.

Facts

• The Order-in-Original under Section 73 was passed on 21.11.2023 and communicated to the assessee on the same day.

• The assessee filed an appeal under Section 107 along with an application for condonation of delay, contending that the order was received only on 14.06.2024 and limitation should run from that date.

• The Additional Commissioner of CT & GST (Appeals) rejected the condonation application and dismissed the appeal, holding that the delay exceeded the statutory outer limit under Section 107(4).

• The High Court dismissed the assessee’s writ petition, affirming that:

  • Communication on 21.11.2023 was admitted and valid in law, starting the limitation period on that date.

  • Section 107(4) implicitly excludes jurisdiction to condone delay beyond the prescribed outer cap of one month past the standard three-month period.

• Aggrieved by the High Court judgment, the assessee filed a Special Leave Petition (SLP) before the Supreme Court.

Decision

• The Supreme Court issued notice to the respondents on the Special Leave Petition (SLP) filed by the assessee.

• The matter has been kept pending for detailed adjudication by the Apex Court.

• The order was passed partly in favour of the assessee.

Key Takeaways

• Limitation Runs From Communication Date: The statutory period for filing an appeal under Section 107 begins from the date the order is duly communicated to the taxpayer, not the date of passing.

• Strict Outer Cap Under Section 107(4): Lower appellate authorities lack statutory power to condone delays extending beyond the three-month appeal period plus the additional one-month condonable window.

• Supreme Court Scrutiny: The Apex Court’s decision to issue notice signals that the strictness and inflexibility of the condonation limitation under Section 107 remains subject to top-court review.