Ms Khalsa Steels vs. State Of Punjab

Held

The High Court held that while the Appellate Authority might not have the power to condone delay beyond the prescribed period, the purpose of the provisions is to ensure that appeals are decided on merits. Citing the Supreme Court's decision in M/s Tecnimont Pvt. Ltd. vs. State of Punjab and others (2019) and its own prior judgment in M/s Vasudeva Engineering's case, the Court proposed to dispose of the writ petition by directing the Appellate Authority to decide the appeal on merits. The Court explicitly condoned the delay in filing the appeal. The petitioner was granted the liberty to raise all objections on merits before the Appellate Authority, and was directed to appear on December 19, 2024, for that purpose. No issue was expressly left undecided.

Facts

The petitioner, M/s Khalsa Steels, filed a writ petition before the Punjab and Haryana High Court challenging the rejection of their appeal by the Appellate Authority on grounds of limitation. The appeal was found to be belated by 4 months and 10 days. The petitioner argued that their appeal should have been decided on merits, not rejected solely on the delay. The State, represented by the Additional Advocate General, accepted notice and agreed to dispose of the matter at that stage. The petitioner relied on a previous judgment of the High Court in "M/s Vasudeva Engineering v. The Union of India and others" (2024) which condoned delay in filing appeals.

Key Issues

1. Whether the Appellate Authority erred in rejecting the petitioner's appeal solely on the ground of limitation, thereby precluding a decision on merits, as contemplated under Section 107 of the CGST Act, 2017? Petitioner's contention: The petitioner argued that the Appellate Authority should have decided the appeal on merits and not rejected it on limitation. They relied on the High Court's judgment in "M/s Vasudeva Engineering v. The Union of India and others" (2024), which held that the powers under Section 107 of the Act would not be subject to filing within the prescribed time if it deprives a person of a hearing, and that delay could be condoned in such circumstances. The petitioner also highlighted that the cancellation of GST registration has cascading effects, necessitating an efficacious remedy. Revenue's contention: The State counsel objected, arguing that the Appellate Authority does not possess the power to condone delay beyond the period prescribed under the Rules.