Gharda Chemical Limited vs. Union Of INDIA

Held

The Court held that the order dated 11th December 2023, which dismissed the petitioner's appeal as time-barred, is liable to interference and is therefore quashed. The Court reasoned that an order adversely affecting a party must contain reasons, as reason is the soul of any judicial, quasi-judicial, or administrative decision. The provision under Section 107(4) of the CGST/RGST Act, 2017, empowers the Appellate Authority to entertain an appeal beyond three months if the assessee demonstrates sufficient cause. Therefore, the Appellate Authority must record a finding on whether the petitioner showed sufficient reason for not filing the appeal within the initial period. The Court emphasized that a statutory appeal cannot be dismissed even on the ground of delay without a reasoned order. Consequently, the statutory appeal preferred by the petitioner on 11th April 2024 is restored to its original records for a fresh decision by the Appellate Authority.

Facts

The petitioner, Gharda Chemical Limited, is challenging the dismissal of its appeal by the Appellate Authority. The Appellate Authority dismissed the appeal vide an order dated 07th October 2022, holding it to be time-barred. The petitioner had deposited interest on late tax payments for November 2017 and March 2018. A show cause notice was issued on 19th September 2023 for the Financial Year 2017-18, followed by an order dated 11th December 2023 confirming a demand of tax, interest, and penalty. The petitioner filed an appeal on 11th April 2024, which was subsequently dismissed as time-barred, leading to the present writ petition.

Key Issues

1. Whether the Appellate Authority's order dismissing the appeal as time-barred, without providing a reasoned order, is sustainable in law, particularly concerning the provisions of Section 107(4) of the CGST/RGST Act, 2017? The petitioner argued that the Appellate Authority's decision lacked a reasoned order, which is essential for any judicial or quasi-judicial decision that adversely affects a party. They highlighted that the appeal memorandum contained relevant information in column 17 of Form GST APL-01. The petitioner contended that the dismissal of the appeal, even on grounds of delay, necessitates a reasoned order. The respondents, through the learned Additional Advocate General, submitted that under Section 107(4) of the CGST/RGST Act, 2017, the period of limitation cannot be extended by a further month unless the assessee demonstrates sufficient cause for not preferring the appeal within the initial three months. The Court acknowledged this submission but emphasized the Appellate Authority's duty to record a finding on sufficient cause.