Principle of Section 14 Limitation Act applies to exclude time spent pursuing bona fide rectification proceedings under CGST Act.

The petitioner, a registered druggist, was served a demand for excess Input Tax Credit (ITC) for F.Y. 2020-21. An Order-in-Original was passed on 03.01.2025 confirming a demand of ₹90,948/- plus penalty and interest

On 08.03.2025, within the statutory three-month window, the petitioner filed a Rectification Application under Section 161 of the CGST Act

This application was rejected on 24.04.2025. Subsequently, the petitioner filed a statutory appeal under Section 107 on 23.05.2025

The Appellate Authority dismissed the appeal as time-barred, noting it was filed beyond the four-month maximum limit (3 months normal + 1 month condonable) from the date of the original order

1. Whether the period spent bona fide pursuing a Rectification Application under Section 161 can be excluded when computing the limitation period for filing an appeal under Section 107 of the CGST Act

2. Whether the High Court can entertain a writ petition against an appellate order when a further statutory remedy (Appellate Tribunal) is available

3. Whether the Appellate Authority is obligated to provide an opportunity to explain delays when an appeal is filed within the "extended" one-month period

The court applied Section 107 of the CGST Act, which prescribes a three-month limitation and a one-month condonable window for appeals

It invoked Section 29(2) of the Limitation Act, 1963, to establish that while Section 5 (general condonation) is excluded by the special time-limit in the CGST Act, the principles of Section 14 (exclusion of time for bona fide proceedings) remain applicable

Precedents cited include M.P. Steel Corporation v. CCE [p.28] and Consolidated Engineering Enterprises v. Principal Secretary, which established that Section 14 principles apply to quasi-judicial tribunals to prevent penalizing diligent litigants

It further relied on State of M.P. v. Pradeep Kumar regarding the procedural requirement to allow appellants to cure a failure to file a delay condonation application

The Court reasoned that Section 14 of the Limitation Act is not about the "discretion" to condone delay (Section 5), but the "mandatory exclusion" of time spent in abortive but bona fide proceedings

It found that the petitioner satisfied the criteria for Section 14: the Rectification Application was filed within the statutory period (due diligence) and was based on established legal positions regarding ITC (good faith)

By excluding the 48 days spent on the rectification process, the court calculated that the appeal filed on 23.05.2025 fell within the "extended" one-month period permitted under Section 107(4)

Regarding maintainability, the court held that since the writ was filed within the timeframe allowed for a Tribunal appeal, and involved a patent legal error regarding limitation, judicial review was appropriate

Finally, the Court noted that Section 107(8) necessitates a "reasonable opportunity" of being heard, which includes allowing a litigant to file a formal condonation application if the appeal is within the condonable window

It ruled that time spent on a Section 161 Rectification Application must be excluded if pursued with due diligence. The impugned Order-in-Appeal dated 19.02.2026 was set aside and quashed

The matter was remanded to the Appellate Authority with directions to provide the petitioner an opportunity to file a condonation application for the delay and, if satisfied, to hear the appeal on its merits