M/S. Chandra Gupta And Associates vs. Commissioner Of Central Tax (Appeals-Ii) & Anr.

Facts

The petitioner, M/s. Chandra Gupta and Associates, filed a writ petition challenging an Order-in-Appeal dated 08.05.2024. This order rejected the petitioner's appeal against an order dated 04.11.2023, which had dismissed the petitioner's application for revocation of its GST registration cancellation. The GST registration was initially cancelled by an order dated 11.07.2023, pursuant to a Show Cause Notice (SCN) dated 08.05.2023. The petitioner's appeal to the Appellate Authority against the rejection of revocation was filed on 09.02.2024, which was six days beyond the stipulated three-month period under Section 107(1) of the CGST Act. The petitioner provided an explanation for the delay, citing a pending rectification request under Section 161 of the CGST Act.

Held

The Court held that the Appellate Authority erred in not considering the petitioner's explanation for the delay in filing the appeal. The Court noted that Section 107(4) of the CGST Act grants the Appellate Authority the power to condone a delay of up to one month in filing an appeal. The petitioner's appeal was delayed by only six days, which was within the condonable period. The Court found that the petitioner had provided sufficient reasons for the delay, and this explanation ought to have been considered and the delay condoned. The reasoning was that the Appellate Authority failed to exercise its power under Section 107(4) of the CGST Act. The ratio decidendi is that Appellate Authorities must consider explanations for delay, especially when the delay is within the condonable period prescribed by statute, and failure to do so amounts to an error. The Court set aside the impugned Order-in-Appeal and remanded the matter to the Appellate Authority for consideration on merits, directing expeditious disposal.

Key Issues

1. Whether the Appellate Authority erred in rejecting the petitioner's appeal on grounds of delay without considering the explanation provided for the delay, particularly in light of Section 107(4) of the CGST Act which allows condonation of delay by one month. Petitioner's Arguments: The petitioner contended that the Appellate Authority failed to consider the explanation for the six-day delay in filing the appeal. They argued that the delay was due to a pending rectification request under Section 161 of the CGST Act, which gave them hope for a resolution. The petitioner further submitted that Section 107(4) of the CGST Act empowers the Appellate Authority to condone a delay of up to one month, and their delay fell within this permissible limit. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (Commissioner of Central Tax (Appeals-II) & Anr.).