Tvl.Amman Arul Spinners vs. The Deputy Commissioner (CT) (GST) (Appeals)

Facts

The petitioner, Tvl.Amman Arul Spinners, filed a writ petition challenging an order dated 27.03.2026 passed by the Deputy Commissioner (CT) (GST) (Appeals), Erode, which rejected their appeal as being filed beyond the limitation period. The petitioner had initially received a show cause notice dated 25.11.2024. Due to an oversight by the person handling the work, the petitioner failed to respond, leading to an ex-parte assessment order dated 24.02.2025. The assessing authority later rectified this order on 20.03.2025. The petitioner then filed a rectification application on 28.03.2025, which was rejected on 04.03.2026. Subsequently, the petitioner filed an appeal on 12.03.2026, which was deemed time-barred by the appellate authority.

Held

The Court held that the petitioner deserved an opportunity to present their case. The reasoning was based on the fact that the initial assessment order was passed ex-parte, the petitioner did not delay in pursuing their rights, the respondent themselves rectified the order, and the rectification application was filed promptly. Furthermore, it took nearly a year for the respondent to reject the rectification application. Consequently, the Court set aside the assessment order dated 24.02.2025, the rectification order dated 20.03.2025, and the impugned order dated 27.03.2026. The matter was remitted back to the file of the 2nd respondent for fresh consideration. The Court directed the petitioner to deposit 15% of the disputed tax amount within four weeks, noting that 10% had already been deposited. Upon deposit, the petitioner was to appear before the respondent to submit their reply and documents, and the respondent was to pass orders afresh. Any bank account attachment made pursuant to the impugned order was also to be raised.

Key Issues

1. Whether the appeal filed by the petitioner before the 1st respondent was liable to be rejected on the ground of limitation, considering the circumstances presented by the petitioner? 2. Whether the period between the filing of the rectification application and the rejection of the same by the respondent should be considered for condoning the delay in filing the appeal? Petitioner's Arguments: The petitioner contended that due to the circumstances explained, they could not avail the opportunity to respond to the show cause notice and subsequently did not take immediate steps to file an appeal while expecting a rectification of the order. They argued that at least the period during which the rectification application was pending should be considered for calculating the delay. Respondents' Arguments: The respondents argued that Section 107 of the GST Act clearly prescribes the period of limitation and the outer limit for condonation. They submitted that when an outer condonable limit is stipulated, it is mandatory, and therefore, the appeal filed beyond that period was rightly rejected. They also pointed out that the petitioner chose to file a rectification application when the remedy of appeal was available.