M/S Multi Trading Agencies, Drangbal vs. Union Territory Of J And K And Ors. (Sales Tax)

Held

The Court held that the Appellate Authority under Section 107(4) of the GST Act, 2017, has the discretion to condone delays in filing appeals beyond the initial three-month period, but this discretion is strictly limited to a maximum of thirty days. The legislature, by enacting Section 107(4), has expressly foreclosed any further discretion to condone delays beyond this thirty-day period, even by invoking Section 29 of the Limitation Act or Section 5 of the Limitation Act. However, the Court also held that while statutory prohibitions are strong considerations, they do not bar the High Court's extraordinary jurisdiction under Article 226 of the Constitution to condone delays if it is of the opinion that applying the delay-barring statute would result in gross injustice. Each case must be evaluated on its specific facts. In the present cases, the Court found that the circumstances presented by the petitioners did not constitute exceptional situations warranting interference under Article 226. For WP(C) No.639/2024, the Court directed the petitioner to approach the Competent Authority for restoration of GST registration, subject to completion of formalities, filing returns, and depositing taxes and penalties within seven days, based on previous similar orders and concessions from the respondents. The Court explicitly stated that this disposal was based on peculiar facts and analogy of previous cases and not an expression of opinion on the maintainability of writ petitions despite alternative remedies.

Facts

These writ petitions concern the condonation of delay in filing appeals under the Goods and Services Tax (GST) Act, 2017. The petitioners are various entities and individuals who had their GST registrations cancelled or faced adverse orders from adjudicating authorities. They subsequently filed appeals before the Appellate Authority, but these appeals were dismissed as time-barred. The core issue revolves around the Appellate Authority's power to condone delays beyond the statutory limits prescribed in Section 107 of the Act, and whether the High Court, under its writ jurisdiction, can intervene to direct condonation of such delays. The petitioners argue for condonation due to various reasons, including illiteracy, lack of knowledge of online procedures, and issues with receiving physical notices. The respondents, representing the State Tax Department, contend that the statutory limitations are binding.

Key Issues

1. Whether the Appellate Authority under Section 107(4) of the GST Act, 2017, is competent to condone the delay in filing an appeal beyond a period of one month after the expiry of the three-month period prescribed under Section 107(1) of the Act? 2. Even if the Appellate Authority lacks the power to condone delays beyond thirty days, can this Court, in its extraordinary jurisdiction under Article 226 of the Constitution of India, direct such condonation if a case of exceptional nature is made out or if the interest of justice warrants it? Petitioner's Arguments: The petitioners contend that the Appellate Authority's power to condone delay is not absolute and that in cases of genuine hardship, illiteracy, or lack of proper communication, the High Court should exercise its writ jurisdiction to ensure substantial justice. They rely on the principle that procedural bars should not defeat substantive justice in exceptional circumstances. Revenue's Arguments: The revenue argues that Section 107(4) of the Act of 2017 strictly limits the Appellate Authority's power to condone delay to a maximum of thirty days beyond the initial three-month period. They assert that this statutory prohibition, particularly the exclusion of Section 5 of the Limitation Act, is binding and that the High Court should not override these legislative provisions through its writ jurisdiction, except in very rare and exceptional circumstances.