Delay In GST Appeal Condonable On Showing Sufficient Cause: Gujarat High Court

The Gujarat High Court on 17 April, held that a short delay in filing an appeal under the GST regime can be condoned if the appellant demonstrates “sufficient cause”, and that appellate authorities must apply their mind to the reasons instead of mechanically rejecting appeals on limitation.

A Division Bench comprising Justices A.S. Supehia and Pranav Trivedi allowed the writ petition filed by Manjulaben Vinod Patel and quashed the appellate order rejecting the appeal as time-barred. The judges held:

“....when the discretion was there with the Appellate Authority to condone the delay if it was satisfactorily explained, this Court has no hesitation in observing that the reason envisaged by the petitioner for delay of 25 days over and above 90 days is properly explained.”

The case arose from proceedings under Section 73 of the CGST/GGST Act concerning alleged excess availment of Input Tax Credit (ITC) for FY 2019–20 based on mismatch with GSTR-2A. The department issued a show cause notice in Form GST DRC-01 and passed an order confirming tax, interest, and penalty.

Manjulaben Vinod Patel, the petitioner, challenged the order by filing an appeal in Form GST APL-01. The Appellate Authority rejected the appeal on the ground that it was filed beyond the limitation period of three months prescribed under Section 107(1) of the CGST Act.

The petitioner contended that the delay of around 25 days was bona fide and arose due to uncertainty caused by the introduction of Section 128A of the CGST Act (Finance Act, 2024), amendments to Sections 16(5) and 16(6) relating to Input Tax Credit, and non-availability of relevant forms on the GST portal during the relevant period. Further that these overlapping statutory and procedural changes required time to decide between opting for the amnesty scheme or pursuing the appeal.

Accepting the submissions, the High Court held that Section 107(4) of the CGST Act permits condonation of delay within the statutorily prescribed additional period, subject to “sufficient cause”.

The Bench held that appellate authorities cannot reject appeals mechanically and must evaluate whether the explanation satisfies the statutory threshold of “sufficient cause”. It observed:

“Section 107 (4) of the Act confers discretion to the Appellate Authority, to allow additional one month in case he/she is satisfied that the appellant was prevented by "sufficient cause" from presenting the appeal The statute, thus provides additional one month to file the appeal, and all the reasons satisfying the expression "sufficient cause” can be raised by the appellant, and the appellant authority is required to apply its mind on the reasons assigned for belatedly filing the appeal i.e beyond the period of 90 days.”

The judges noted that the explanation offered by the petitioner was bona fide and adequately accounted for the delay, thereby satisfying the requirement of “sufficient cause”.

Accordingly, the High Court remanded the matter to the Appellate Authority for fresh adjudication on merits.

For Appellant: Advocate, Darshan B Gandhi

For Respondent: AGP, Pooja Ashar