Rejection of Appeal Condoned as 19-Day Delay Due to Medical Reasons Remanded for Hearing on Merits
Rejection of Appeal Condoned as 19-Day Delay Due to Medical Reasons Remanded for Hearing on Merits
Issue
Whether a 19-day delay in filing an appeal under Section 107 of the CGST Act, 2017 should be condoned and the matter remanded for hearing on merits when the delay was caused by the medical illness of the company director and closure of business operations.
Facts
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Rejection on Limitation: The appellate authority rejected the assessee’s statutory appeal on the threshold ground of limitation due to a delay of 19 days in filing.
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Reason for Delay: The assessee explained that it had shut down its business operations a year prior, was filing Nil returns, and could not file the appeal within the prescribed timeframe because its director was suffering from illness.
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Evidence Submitted: The assessee furnished relevant medical records and supporting documents to substantiate the director’s illness and establish a genuine reason for the delay.
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Absence of Tribunal: The assessee complied with statutory formalities, but the Appellate Tribunal (GSTAT) had not yet been established to hear further appeals.
Decision
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Sufficient Cause Established: The Court held that the assessee provided adequate justification for the 19-day delay supported by medical documentation.
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Compliance Verified: It was noted that the assessee had fulfilled necessary statutory formalities for preferring the appeal.
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Remanded to Appellate Authority: In the absence of an operational Appellate Tribunal, the order rejecting the appeal on limitation grounds was set aside, and the matter was remanded back to the Appellate Authority for hearing and disposal on merits.
Key Takeaways
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Substantive Justice Over Technicalities: A minor delay (such as 19 days) in filing an appeal should be condoned when supported by valid medical evidence to ensure disputes are decided on merits.
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Remedy in Absence of Tribunal: Pending the functional establishment of the Goods and Services Tax Appellate Tribunal (GSTAT), High Courts will grant procedural relief and remand appeals to lower appellate authorities to safeguard taxpayer rights.
HIGH COURT OF CALCUTTA
Horizon Hi Tech Engicon Limited
v.
State of West Bengal
Raja Basu Chowdhury, J.
WPA No. 3258 of 2025
JUNE 18, 2025
Himangshu Kumar Ray, Subhasis Podder, Ms. Shiwani Shaw, Animitra Roy and S. Chakraborty for the Petitioner. A. Ray, Ld. GP, Md. T.M. Siddiqui, Ld. AGP, T. Chakraborty, D. Sahu and S. Sanyal for the Respondent.
ORDER
1. Affidavit of service filed in Court today is retained with the record.
2. Challenging the order dated 12th December 2024 passed by the appellate authority under Section 107 of the WBGST /CGST Act, 2017 (hereinafter referred to as the “said Act”) rejecting the appeal filed by the petitioner on the ground of delay of 1[19] days in preferring the appeal, the instant writ petition has been filed.
3. It is the petitioners’ case that the petitioners could not prefer the appeal in time from the order passed under Section 73 of the said Act dated 22nd March 2024 since, the petitioners had closed down the business for one year and had filed nil returns. The petitioners also contend that the director of the petitioner no. 1 who is responsible for taking all major decisions was not well and as such, could not prefer the appeal in time.
4. Mr. Ray, learned advocate appearing for the petitioner would submit that this Hon’ble Court in the facts of the case may be pleased to set aside the order and remand the matter back to the appellate authority.
5. Having heard the learned advocates appearing for the respective parties, I may note that admittedly in this case there is a delay in preferring the appeal. Although, the petitioners claim that the business of the petitioners had been closed down for the last one year, however, the petitioners also had filed returns. It is, however, the case of the petitioners that the petitioners’ director being unwell, no steps could be taken to prefer the appeal from the order passed under Section 73 of the said Act. The petitioners have disclosed medical documents in support of the health condition of its director.
6. I find that the appellate authority by taking note of the aforesaid aspect has, inter alia, observed as follows: –
“…………………………………………………………………..
In the instant case, mere saying the reason for delay of the appeal submission is due to the fact that the petitioner closed his business operation since January 2023 and therefore no one from the company was aware of the adjudication order cannot be considered a sufficient cause filing the Appeal after a gap of nineteen long days from the stipulated time period. Again this logic appears to be misleading as the appellant was found submitting returns from time to time even after close down of its operation which means the appellant used his GST portal on regular basis. So, in this instant case I do not find any sufficient cause to condone the delay. “
7. At the same time, one cannot lose sight of the fact that the closure of the business does not absolve a Registered Tax Payer from making payment of tax or from filing returns. The petitioners appear to have complied with the statutory formalities. Simply because the petitioners had filed the returns notwithstanding the closure of its business, the same cannot be a ground to deny relief to the petitioners as in such case, the petitioners will be penalized for having complied with the provisions of the said Act.
8. In any event, I may note that the provisions of the said Act provides for a multi tiered adjudicatory process. Admittedly, the appellate tribunal is yet to be constituted. Ordinarily, to test out the case of the petitioners on merits, this Court would be required to enter into the details and enquire into the facts which are ordinarily accessible by a proper officer on the portal. In the fitness of things, in my view and noting the length of delay, inter alia, including the explanation provided, it would be prudent to set aside the order passed by the appellate authority and remand the matter back to the appellate authority for the appellate authority to hear out and dispose of the appeal on merits.
9. Accordingly, the order dated 12th December 2024 passed by the appellate authority rejecting the appeal on the ground of limitation, stands set aside and the matter is remanded back to the appellate authority who shall hear out the case on merits as expeditiously as possible preferably, within 16 weeks from the date of communication of this order subject to compliance of all requisite formalities by the petitioners.
10. With the above observation and direction, the writ petition is disposed of.
11. All parties shall act on the basis of the server copy of this order duly downloaded from this Court’s website.