Sufficient cause and statutory pre-deposit justify condoning appellate delay under Section 107 of the CGST Act.

The adjudicating authority passed an order under Section 73 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) on 13 March 2023, which was communicated to the petitioner through the GST portal.

The petitioner filed an appeal under Section 107 on 21 August 2023, challenging the quantum of interest levied by the authorities.

The First Appellate Authority dismissed the appeal by order dated 29 November 2023, holding that it had been filed beyond the period prescribed under Sections 107(1) and 107(4), and issued Form GST APL-02.

The petitioner attributed the delay to the serious illness of the person entrusted with monitoring and communicating the order, and relied upon medical documents and the explanation furnished in response to the show-cause notice.

The petitioner had also paid the mandatory pre-deposit under Section 107(6).

It therefore challenged the appellate order in writ proceedings and sought condonation of delay and a direction for adjudication of the appeal on merits.

Whether the First Appellate Authority was justified in dismissing the petitioner’s statutory appeal as time-barred despite the petitioner having shown sufficient cause for the delay.

Whether payment of the mandatory pre-deposit under Section 107(6), coupled with the explanation for delay, warranted interference with the appellate order and admission of the appeal on merits.

The Court applied Section 107(1) of the CGST Act, which prescribes the ordinary period for filing an appeal; Section 107(4), which permits condonation of delay within the statutorily permissible extended period upon sufficient cause; and Section 107(6), which requires payment of the mandatory pre-deposit for pursuing the appeal.

The Court further applied the principle that a statutory appellate remedy should not be defeated by an unduly technical approach where the litigant has demonstrated sufficient cause for delay and substantially complied with the statutory pre-deposit requirement.

The Court found that the petitioner’s explanation was bona fide and supported by medical documents showing that the person responsible for attending to the business affairs had fallen seriously ill, resulting in the petitioner remaining unaware of the communicated order.

The petitioner had thereafter filed the appeal and paid the mandatory pre-deposit.

In these circumstances, the First Appellate Authority’s dismissal solely on limitation, without giving due effect to the sufficient cause shown and the substantial compliance with Section 107(6), was held to be hyper-technical and to render the appellate remedy illusory.

The Court therefore considered interference necessary to secure the ends of justice and directed that the delay be condoned.

The First Appellate Authority’s order dated 29 November 2023 dismissing the appeal was quashed and set aside.

The delay from the date of communication of the adjudication order dated 13 March 2023 was condoned, and the appellate authority was directed to admit and hear the appeal on merits.

The appeal was to be disposed of by a reasoned order within three weeks from communication of the High Court’s order, after affording the petitioner an opportunity of hearing.

The petitioner was directed not to seek any further adjournment, failing which the appeal could be decided ex parte.

The writ petition was accordingly disposed of.