M/S Kesarwani Traders vs. State Of U.P. And 2 Others

Held

The Court held that the appellate order dated 04.02.2026, which rejected the appeal on the ground of delay, was not satisfactory as it did not consider the grounds taken by the petitioner in their memo of appeal for condonation of delay. The Court noted that the appellate authority had failed to examine the tenability of the reasons provided for the delay. The Court acknowledged the submission by the Standing Counsel that the matter could be remitted back. Therefore, the Court set aside the appellate order and remitted the matter back to the appellate authority. The appellate authority is directed to consider the appeal, including the delay condonation application, and pass fresh orders in accordance with the law within two months. The Court explicitly stated that it had not gone into the merits of the case, leaving all questions open for the Appellate Authority to decide.

Facts

M/s Kesarwani Traders, a firm registered under the U.P. Goods and Services Tax Act, 2017, received a show cause notice on 20.12.2023 from the Assistant Commissioner, Commercial Tax Department, for the Financial Year 2018-19, demanding tax, interest, and penalty totaling Rs. 5,91,64/-, Rs. 4,97,18/-, and Rs. 20,000/- respectively. The petitioner failed to appear on the hearing date due to alleged negligence of their Chartered Accountant and Advocate. A subsequent reminder was issued on 08.02.2024, with a hearing scheduled for 23.02.2024. The petitioner claims the show cause notice was transmitted to the 'View Additional Notices and Orders' section, preventing them from filing a reply. An ex-parte assessment order was passed on 16.04.2024, creating a demand of Rs. 63,096/- as tax, Rs. 56,692/- as interest, and Rs. 20,000/- as penalty. The petitioner filed an appeal with a delay condonation application on 02.01.2026, which was rejected by the Additional Commissioner, Grade-II (Appeal) on 04.02.2026, citing the delay.

Key Issues

1. Whether the appellate authority erred in rejecting the appeal on the ground of delay without considering the reasons provided in the delay condonation application, as required by Section 107(4) of the U.P. Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that the appellate authority failed to consider the specific grounds disclosed for the delay in filing the appeal, which were detailed in the delay condonation application. These grounds included the business being permanently closed since 12.02.2025, the main partner being ill on the hearing date (20.12.2023), and the petitioner only becoming aware of the ex-parte order during recovery proceedings. The petitioner contended that these reasons constituted sufficient cause for the delay and should have been considered. Respondents' Contention: The Standing Counsel for the respondents submitted that while the appellate order was not worded ideally, there was an admitted delay. However, he conceded that the impugned order ought to have been passed after considering the contentions raised by the petitioner in their delay condonation application.