The Gujarat High Court has held that a taxpayer who filed a GST appeal before the January 31, 2024 cut-off cannot be denied the benefit of a special procedure introduced to allow appeals affected by limitation.

The procedure permitted eligible taxpayers to file appeals against orders under Sections 73 and 74 of the Central Goods and Services Tax Act by January 31, 2024, subject to prescribed payment conditions.

The Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati made the ruling while setting aside an appellate order that rejected a taxpayer's appeal solely on the ground of delay.

The court also held that the appellate authority was required to consider the November 2, 2023 notification and could not wait for the taxpayer to specifically point out its provisions.

“The taxpayer like the petitioner who have filed the appeal before the cutoff date i.e. 31.01.2024, cannot be barred from the laudable object of the GST Council, which has resulted the issuance of the Notification,” the Court held.

The Court further observed that the appellate authority was “supposed to consider” the November 2, 2023 notification when it passed the June 11, 2024 order. However, the authority had not taken any cognizance of the notification.

“The appellate authority cannot wait for the taxpayer to point out the provisions of the notification issued by the Government of India and it is to be presumed that any Notification issued by the Government of India will be known to the appellate authority, more particularly, when it regulates the provision under Section 107 of the Act read with Sections 73 and 74 of the Act,” the bench held.

The court was hearing a petition filed by Adinath Rice Mill and another challenging the June 11, 2024 appellate order passed under Section 107 of the Central Goods and Services Tax Act, 2017. The appellate authority had rejected the appeal solely on the ground that it was filed beyond the prescribed limitation period.

The petitioners had received the physical copy of the original order dated January 27, 2023, passed under Section 74 of the Act, on March 25, 2023. They subsequently filed their appeal on December 28, 2023.

The November 2, 2023 notification provided a special procedure for taxpayers who could not file appeals against orders under Sections 73 or 74 within the prescribed limitation period. It also covered taxpayers whose appeals had been rejected solely on the ground of delay and permitted eligible appeals to be filed by January 31, 2024, subject to specified payment conditions.

The Revenue argued that the notification did not apply because the petitioners' appeal had not been rejected on the ground of delay when the notification was issued. It contended that the notification was meant to permit fresh appeals where appeals had already been rejected on the ground of limitation.

The High Court rejected the contention after examining the minutes of the 52nd GST Council meeting held on October 7, 2023. The Court noted that the Council had considered cases where appeals filed beyond the limitation period were either pending before appellate authorities or had been rejected for non-compliance with the prescribed time limit.

The court held that the notification covered multiple categories of taxpayers, including those whose appeals had been rejected for delay and those whose appeals were to be filed within the extended period ending January 31, 2024, among other categories. The latter category was subject to the payment conditions prescribed under paragraph 3 of the notification.

The bench held that the petitioners could not be placed at a lower pedestal than taxpayers whose appeals had already been rejected for delay and who were subsequently permitted to file appeals under the notification. It also recorded that the petitioners had fulfilled the payment conditions prescribed under paragraph 3.

The court observed that the notification served the interests of both taxpayers and the Revenue. It enabled eligible taxpayers to pursue their appeals while allowing the Revenue to collect the prescribed tax, interest, and penalty.

The High Court accordingly quashed and set aside the impugned notice and appellate order. It remanded the matter to the appellate authority for a decision on merits in accordance with law and directed that the appeal be decided within 12 weeks from receipt of a copy of the order.

For the Petitioners: Advocate Uchit N. Sheth, 

For Respondents Nos. 1 & 3: Advocate Deepak N. Khanchandani

For Respondent No. 2: Advocate Archit P. Jani

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Case Title :  Adinath Rice Mill & Anr. v. Union of India & Ors.Case Number :  R/Special Civil Application No. 14806 of 2024CITATION :  2026 LLBiz HC (GUJ) 112
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