2025 (1) TMI 923 - HC - GST

Violation of principles of natural justice - Rejection of petitioner s appeal solely on the grounds of delay - petitioner contends that it is a central public sector undertaking and that such rejection, without addressing the merits of the appeal, violates principles of natural justice - HELD THAT - Taking into account the arguments put forth by the parties, this Court finds that the petitioner has adequately explained the reasons for the delay in filing the appeal. Regrettably, the appellate authority failed to appropriately consider this aspect and proceeded to summarily observe that, since the appeal was filed after a delay of 246 days, no reasonable cause was demonstrated for the delay. It is evident that the appellate authority mechanically dismissed the application for condonation of delay as well as the appeal, without adequately considering the petitioner s lack of knowledge regarding the impugned order's issuance. Such an omission renders the appellate order perverse. It is pertinent to note the Division Bench ruling in S.K. CHAKRABORTY SONS VERSUS UNION OF INDIA ORS. 2023 (12) TMI 290 - CALCUTTA HIGH COURT , wherein it was held that the appellate authority is empowered to condone delays extending beyond the statutory period under Section 107 (4) of the Act. The order dated September 25, 2024, passed by the appellate authority is unsustainable and is accordingly quashed. Considering the explanation provided by the petitioner, this Court deems it unnecessary to remit the matter to the appellate authority for reconsideration of the application for condonation of delay - Petition disposed off.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the appellate authority erred in rejecting the petitioner's appeal solely on grounds of delay without considering the merits of the case.
Whether the principles of natural justice were violated due to the manner in which notices were communicated to the petitioner.
Whether the appellate authority has the power to condone delays extending beyond the statutory period under Section 107 of the CGST Act.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Rejection of Appeal on Grounds of Delay

Relevant legal framework and precedents: The appeal was rejected under the provisions of the CGST Act, specifically concerning the limitation period for filing appeals. The court referred to precedents such as S.K. Chakraborty & Sons v. Union of India, highlighting the appellate authority's power to condone delays.
Court's interpretation and reasoning: The court found that the appellate authority dismissed the appeal without adequately considering the petitioner's explanation for the delay, which was attributed to a lack of knowledge about the issuance of the impugned order.
Key evidence and findings: The petitioner provided reasons for the delay, including procedural anomalies and lack of awareness due to improper communication of notices.
Application of law to facts: The court applied the principles from the cited precedents, determining that the appellate authority should have considered the petitioner's explanation for the delay.
Treatment of competing arguments: The respondent's argument focused on the strict adherence to the limitation period, while the petitioner argued for the condonation of delay based on procedural lapses.
Conclusions: The court concluded that the rejection of the appeal solely on delay grounds was unsustainable and quashed the appellate authority's order.

Issue 2: Violation of Natural Justice

Relevant legal framework and precedents: The principles of natural justice require fair hearing and proper communication of notices. The court referenced the judgment in Anhad Impex & Anr. v. Assistant Commissioner, emphasizing the need for adherence to these principles.
Court's interpretation and reasoning: The court acknowledged the petitioner's claim of not receiving proper notice due to the unconventional method of communication via the GST portal.
Key evidence and findings: Notices were uploaded online without direct communication, leading to the petitioner's unawareness of the proceedings.
Application of law to facts: The court recognized the procedural deficiency in notifying the petitioner and its impact on the appeal process.
Treatment of competing arguments: The petitioner argued for a breach of natural justice, while the respondent maintained that the notices were adequately communicated.
Conclusions: The court found that the lack of proper notice constituted a breach of natural justice, impacting the fairness of the proceedings.

Issue 3: Power to Condon Delays

Relevant legal framework and precedents: Section 107 of the CGST Act and the Division Bench ruling in S.K. Chakraborty & Sons v. Union of India were pertinent to this issue.
Court's interpretation and reasoning: The court interpreted that the appellate authority has the discretion to condone delays beyond the statutory period, especially when reasonable cause is demonstrated.
Key evidence and findings: The petitioner's delay was attributed to procedural anomalies, which the court deemed a reasonable cause.
Application of law to facts: The court applied the legal principles to conclude that the delay should be condoned, allowing the appeal to be heard on its merits.
Treatment of competing arguments: The petitioner argued for the condonation of delay, while the respondent focused on statutory limitations.
Conclusions: The court directed the appellate authority to hear the appeal on merits after condoning the delay.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "The appellate authority mechanically dismissed the application for condonation of delay as well as the appeal, without adequately considering the petitioner's lack of knowledge regarding the impugned order's issuance."
Core principles established: The judgment reinforces the principle that appellate authorities must consider reasonable causes for delay and ensure adherence to natural justice by proper communication of notices.
Final determinations on each issue: The court quashed the appellate authority's order, directed the condonation of delay, and mandated a fair hearing on the appeal's merits.

The judgment underscores the importance of procedural fairness and the discretionary power of appellate authorities to ensure justice is served beyond mere procedural technicalities.

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