High Court Sets Aside Limitation Dismissal and Remands Section 17(5)(d) GST Appeal for Decision on Merits
High Court Sets Aside Limitation Dismissal and Remands Section 17(5)(d) GST Appeal for Decision on Merits
Issue
Whether the High Court under Article 226 can set aside a time-barred appellate order under Section 107 of the CGST/HPGST Act and remand the matter for adjudication on merits when the Appellate Authority lacks statutory power to condone delay beyond the prescribed limit.
Facts
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Challenge to Section 17(5)(d): The petitioner was aggrieved by the retrospective amendment to Section 17(5)(d) of the CGST/HPGST Act concerning blocked input tax credit on the construction of immovable property for business.
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Dismissal of Statutory Appeal: The petitioner filed a statutory appeal under Section 107 against the assessment/order, which was pronounced, communicated, and uploaded on the Department portal.
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Rejection as Time-Barred: The Appellate Authority dismissed the appeal as time-barred, stating that it lacked statutory power to condone delay beyond one month after the expiry of the initial three-month limitation period.
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Writ Jurisdiction Invoked: The petitioner approached the High Court seeking a direction to have the appeal decided on its merits and to assail the constitutional validity/applicability of the retrospective amendment to Section 17(5)(d).
Decision
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Statutory Limitation Recognized: The High Court affirmed that the Appellate Authority was legally bound by Section 107 and lacked competence to condone delay beyond the statutory outer limit of one month post the three-month period.
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Remand for Merits Adjudication: Despite the statutory bar on the Appellate Authority, the High Court exercised its extraordinary writ jurisdiction, set aside the dismissal order, and remanded the matter back to the Appellate Authority to decide the appeal afresh on its merits.
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Liberty to Challenge Validity: The Court reserved liberty to the petitioner to independently challenge and assail the retrospective amendment to Section 17(5)(d).
Key Takeaways
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Writ Relief Against Limitation Dismissals: While administrative appellate authorities cannot exceed their statutory condonation limits under Section 107, High Courts retain extraordinary power under Article 226 to restore appeals for merits adjudication in appropriate cases.
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Substantive Tax Rights Preserved: Technical rejection on limitation grounds should not permanently deprive a taxpayer of a decision on merits, particularly when complex legal and statutory validity issues are involved.
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Dual Remedy Structure: Taxpayers can secure a merits hearing before the Appellate Authority while keeping open their legal right to challenge constitutional/statutory amendments before High Courts.
HIGH COURT OF HIMACHAL PRADESH
Vasanta Resorts and Spa (P.) Ltd.
v.
Union of India
Vivek Singh Thakur and Ranjan Sharma, JJ.
CWP No.12966 of 2026
JULY 31, 2026
Sandeep Goyal, Sr. Adv. and Goverdhan Lal, Adv. for the Petitioner. Anup Rattan, Adv. General, Sushant Keprate, Addl Adv. General and Ms. Rita Thakur, Sr. Panel Counsel for the Respondent.
ORDER
Vivek Singh Thakur, J. – Notice. Ms. Rita Thakur, Senior Panel Counsel and Mr. Sushant Keprate, Additional Advocate General, appear, waive and accept service of notice on behalf of respondent No.1 and respondent Nos.2 to 4 respectively.
2. The petitioner has approached this Court being aggrieved by retrospective amendment of Section 17(5)(d) of Central Goods and Services Tax Act, 2017 (in short ‘CGST Act’) as well as dismissal of the appeal preferred by the petitioner under Section 107 of CGST Act as being time-barred, instead of deciding the same on merits.
3. It has been submitted by learned counsel for the petitioner that the Appellate Authority had no power to condone the delay in filing the appeal and, therefore, the appeal has been dismissed in view of the statutory provisions of the CGST Act. It is further submitted that the petitioner has no other efficacious alternative remedy for seeking a direction to the Appellate Authority to decide the appeal on merits except by approaching this Court.
4. In view of the provisions of CGST Act, once outer limit of period, which can be condoned by the authority, has been prescribed under the Act, the Appellate Authority is not competent to condone the delay beyond the one month after expiry of three months.
5. Learned counsel for the petitioner submits that, at this stage, the petitioner would be satisfied if the impugned order dated 26.02.2026 (Annexure P-13), passed in appeal, is set aside and the matter is remanded to the Appellate Authority for deciding the appeal on merits instead of dismissing it on the ground of being barred by limitation, but reserving liberty to the petitioner to challenge the validity/constitutionality of the amendment to Section 17(5)(d) of the CGST Act in appropriate proceedings, if so required, as permissible under law.
6. Detailed impugned order by Appellate Authority was pronounced on 26.02.2026. It was communicated to the petitioner along with a letter dated 10.03.2026 (Annexure P-13) and was uploaded on the Department’s website on 17.04.2026 (Annexure P14).
7. In view of the above, impugned order dated 26.02.2026 (Annexure P-13) is set aside and matter is remanded to the Appellate Authority to decide the appeal afresh on its own merits instead of dismissing it as barred by limitation.
8. Petitioner is directed to ensure its representation/presence before Appellate Authority on 10.08.2026 and thereafter, Appellate Authority shall decide the appeal afresh on merits within 10 weeks.
9. Parties shall be at liberty to avail appropriate remedy, as may be available to them in accordance with law for redressal of surviving grievances, if any.
10. Petition is disposed of in aforesaid terms by reserving liberty to the petitioner to assail the amendment to Section 17(5)(d) of the CGST Act, if so required/desired, in accordance with law. Pending miscellaneous application(s), if any, also stand disposed of.