Shree Krishna Sales And Services vs. Union Of INDIA And Ors.

Held

The Court held that the petitioner should be afforded one more opportunity to assail the order of the adjudicating authority before the appellate authority on merits. The reasoning was based on the petitioner's desire to challenge the Section 73 order, the apparent inability to do so due to financial reasons, and the fact that an appeal under Section 107 necessitates a statutory pre-deposit. The Court found it appropriate to put the petitioner on terms. Consequently, the Court directed the petitioner to deposit a sum of Rs. 10,000/- with the State Legal Services Authority within two weeks and furnish proof of this deposit to the appellate authority. Upon compliance, the appellate authority is to proceed to hear the appeal on merits. The order dated May 26, 2025, impugned in the writ petition, was declared to be of no effect in such a scenario. No issues were expressly left undecided.

Facts

The petitioner, Shree Krishna Sales and Services, is aggrieved by an order dated May 26, 2025, passed by the appellate authority under Section 107 of the CGST/WBGST Act, 2017. This order dismissed the petitioner's appeal against an order dated August 22, 2024, passed under Section 73 of the same Act. The dismissal was solely on the grounds that the appeal was filed beyond the prescribed statutory time limit. The petitioner's appeal was delayed by 150 days. The petitioner sought condonation of this delay, citing business closure for two years due to the COVID-19 pandemic, financial straits, and a partner withdrawing capital. The appellate authority rejected this explanation, stating the petitioner failed to provide a "sufficient cause" for the delay.

Key Issues

1. Whether the appellate authority erred in law by dismissing the petitioner's appeal under Section 107 of the CGST/WBGST Act, 2017, solely on the ground of delay, without considering the merits of the explanation for the delay, particularly in light of the petitioner's financial difficulties and the impact of the COVID-19 pandemic? Petitioner's Argument: The petitioner argued that the delay in filing the appeal was attributable to severe financial hardship caused by the COVID-19 pandemic, including business closure and a partner's withdrawal of capital. They contended that these circumstances constituted "sufficient cause" for the delay and that the appellate authority should have considered these factors before dismissing the appeal. The petitioner also highlighted that an appeal under Section 107 requires statutory pre-deposit, which was hindered by their financial situation. Revenue/State's Argument: The judgment does not record any specific arguments made by the revenue or the State. The appellate authority's order, as described, focused on the petitioner's failure to submit a reply citing "sufficient cause" against the late submission.