GST| Delay In Filing Appeal Can Be Condoned When Assessee Discharged Substantial Portion Of Disputed Tax Liability: Madras High Court

The Writ Petition before the High Court was filed under Article 226 of the Constitution seeking issuance of a Writ of Certiorari, calling for the records of the first respondent-State Tax Officer. The Petitioner challenged the impugned order passed by the Officer which sought the reversal of the input tax credit availed by the Petitioner for the financial year 2019-2020.

The Single Bench of Justice Vivek Kumar Singh asserted, “In view of the above, this Court is of the view that the appeal should not be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements…”

Advocate Saitanya Kesan represented the Petitioner while Government Advocate J.K. Jayaselan represented the Respondents.

Factual Background

The facts as presented by the Petitioner were that a notice was uploaded in the additional notices column of the common portal and the consultant engaged by the petitioner was unaware of the proceedings initiated by the first respondent. As a result, the petitioner was unable to submit a timely reply. The petitioner became aware of the impugned order when its bank account, maintained with the third respondent bank, was attached by the first respondent in recovery proceedings under Section 79 of the GST Act, 2017. Thereafter, the petitioner filed an appeal along with a petition for condonation of the delay of 35 days under Section 107(4) of the GST Act, 2017. A pre-deposit under Section 107(6) of the Act was also made, amounting to 10% of the tax liability.

The second respondent- Deputy Commissioner (ST) GST Appeals rejected the appeal solely on the ground that the appeal was filed beyond the condonable period of limitation by 5 days.

Arguments

The Counsel for the petitioner submitted that the petitioner had already discharged a total of Rs.13,348 towards CGST and Rs.39,493 towards SGST, which amounts to 25% of the disputed tax demand.

The Government Advocate appearing for the respondents submitted that the petitioner had not demonstrated due diligence in monitoring the common portal, which is the standard procedure for such notices. The notice was validly uploaded to the portal and the petitioner failed to take appropriate action within the stipulated time.

Reasoning

Noting the fact that the second respondent-Deputy Commissioner in rejecting the petitioner's appeal on the ground of delay, applied the provisions of the GST Act strictly, the Bench said, “However, it is the opinion of this Court that the delay of 35 days in filing the appeal, while significant, could be condoned in the interests of justice, considering the circumstances surrounding the delay and the actions already taken by the petitioner to discharge a substantial portion of the disputed tax liability.”

As per the Bench, the appeal should not be dismissed merely due to a procedural delay, especially when the petitioner made an effort to comply with the statutory requirements, including the pre-deposit of 10% of the tax liability and additional payments towards the disputed tax amount.

Thus, the Bench disposed of the Petition by setting aside the Order of the Deputy Commissioner and remanding the matter back to the Commissioner for fresh consideration. “The second respondent is further directed to dispose of the appeal, within two months from the date of receipt of a copy of this order”, the Bench further directed.

Cause Title: Tvl. Chennais Pet v. The State Tax Officer & Anr. (Case No.: W.P.(MD)No.3995 of 2025)

Appearance:

Petitioner: Advocate Saitanya Kesan

Respondents: Government Advocate J.K.Jayaselan

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