M/S Deem Construction Company Private Limited vs. Union Of INDIA

Held

The Court held that while the Appellate Authority is bound by statutory limitation periods under Section 107 of the RGST/CGST Act, 2017, considering the circumstances leading to the delay, which were beyond the petitioner's control, a non-adjudication of the appeal on merits would cause grave injury and prejudice. The Court agreed with the view taken by the Punjab and Haryana High Court in Luxmi Traders, which held that service of a Show Cause Notice (SCN) is not deemed sufficient merely by uploading it on the common portal unless acknowledged or a reply is filed. If an ex-parte order is passed without effective service of SCN, proceedings should be restored to the stage of SCN issuance. Furthermore, if an appeal against an order served only by portal upload is dismissed on limitation, the order of the Appellate Authority should be set aside, and the appeal restored for hearing on merits. The Court also noted that the delay in recovery proceedings post-Order-in-Original lent credence to the petitioner's claim of improper upload. Accordingly, the Court condoned the delay in filing the appeal and directed the Appellate Authority to entertain and adjudicate the appeal on merits, provided it is filed within 30 days of the order's upload.

Facts

The petitioner, M/s Deem Construction Company Private Limited, sought to quash an Order-in-Appeal dated 09.03.2026, which rejected their appeal against an Order-in-Original dated 26.07.2024. The Order-in-Original, passed by the Joint Commissioner, State Tax, imposed a GST demand of Rs. 23,10,856/- along with interest and penalty for the financial year 2019-20, due to declared tax liability discrepancies. The petitioner's appeal to the Appellate Authority was filed with a delay of 264 days. The Appellate Authority dismissed the appeal solely on the grounds of limitation, stating it lacked the power to condone the delay. The petitioner contends that the delay was bona fide, as the Show Cause Notice dated 15.05.2024 was not effectively served, having been uploaded under the wrong tab on the GST portal. They claim to have learned of the Order-in-Original and recovery proceedings only on 23.07.2025.

Key Issues

1. Whether the Appellate Authority erred in dismissing the petitioner's appeal solely on the grounds of limitation, without considering the reasons for the delay, thereby causing grave injury and prejudice to the petitioner? (Question of law and mixed fact and law, turning on the interpretation of powers of Appellate Authority under GST law and principles of natural justice). Petitioner's Arguments: The delay in filing the appeal was bona fide and beyond the petitioner's control. The Show Cause Notice was not effectively served as it was uploaded under an incorrect tab on the GST portal. The petitioner only became aware of the Order-in-Original and recovery proceedings on 23.07.2025. Relying on Division Bench judgments of the Rajasthan High Court (M R Traders, Molana Construction Company, Man Singh Tanwar, RPC PSIPL JV), the petitioner argued that sufficient cause for delay has been shown and the appeal should be considered on merits after condoning the delay. Respondents' Arguments: The respondents contended that the impugned order was rightly passed and the appeal is now barred by limitation.