2025 (4) TMI 1504 - HC - GST

Condonation of delay of 108 days in filing the appeal against the assessment and rectification orders - HELD THAT - In the present case as rightly contended by the learned counsel for the respondents that nothing prevented the petitioner from filing an appeal immediately after passing of the assessment order. But on the other hand the learned counsel for the petitioner submitted that in case the rectification petition was considered there is no need for the petitioner to file an appeal. This Court is of the view that the reasons assigned by the petitioner for the delay in filing the appeal appears to be genuine. Hence this Court is inclined to set aside the impugned order passed by the 1st respondent dated 13.03.2025 and condone the delay of 108 days in filing the Appeal before the 1st Respondent. Petition disposed off.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter were:

(a) Whether the delay of 108 days in filing the appeal against the assessment and rectification orders could be condoned under the relevant statutory provisions.

(b) Whether the petitioner's reliance on having filed a rectification petition prior to filing the appeal constitutes a sufficient and bona fide cause for the delay in filing the appeal.

(d) The conditions, if any, under which the delay in filing the appeal could be condoned, including payment of a portion of the disputed tax demand.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a) & (b): Condonation of Delay in Filing Appeal and Bona Fide Cause

The legal framework governing the filing of appeals against assessment orders under the TNGST Act, 2017, requires appeals to be filed within a prescribed period. Delay beyond this period ordinarily results in dismissal unless the delay is condoned for sufficient cause.

The petitioner filed a rectification petition under Section 161 of the TNGST Act, 2017, immediately after the assessment order dated 14.08.2024, under the bona fide impression that the rectification petition would resolve the issue without the need for an appeal. The rectification petition was rejected by order dated 22.02.2025. Subsequently, the petitioner filed the appeal on 03.03.2025, resulting in a delay of 108 days.

The respondents argued that nothing prevented the petitioner from filing the appeal immediately after the assessment order and that the filing of the rectification petition did not justify the delay. However, the respondents fairly conceded that the delay could be condoned on terms.

The Court examined the petitioner's explanation and found it to be genuine and bona fide, emphasizing that the petitioner's reliance on the rectification petition as a preliminary remedy was reasonable. The Court noted that if the rectification petition had been accepted, the appeal would have been unnecessary, thus providing a valid cause for the delay.

Issue (c): Sustainability of the Impugned Order Dismissing Appeal on Ground of Delay

The impugned order dated 13.03.2025 dismissed the appeal solely on the ground of delay without condoning the same. The Court considered whether such dismissal was justified in light of the petitioner's bona fide explanation and the statutory provisions allowing condonation of delay for sufficient cause.

The Court held that the impugned order was not sustainable as it failed to consider the petitioner's explanation adequately and did not exercise discretion judiciously. The Court emphasized the importance of considering the merits of the appeal rather than dismissing it on technical grounds when a reasonable cause for delay exists.

Issue (d): Conditions for Condonation of Delay

The respondents proposed that the delay could be condoned subject to payment of a portion of the disputed tax demand. The petitioner had already deposited 10% of the disputed tax at the time of filing the appeal and expressed willingness to deposit an additional 5% as a condition for condonation.

The Court accepted this proposal, imposing the condition that the petitioner deposit 5% of the disputed tax demand within four weeks from the date of receipt of the order. Upon such payment, the appeal would be taken on record and decided on merits.

3. SIGNIFICANT HOLDINGS

The Court held:

"The reasons assigned by the petitioner for the delay in filing the appeal appears to be genuine."

"Nothing prevented the petitioner from filing an appeal immediately after passing of the assessment order. But on the other hand, the learned counsel for the petitioner submitted that in case the rectification petition was considered, there is no need for the petitioner to file an appeal."

"Accordingly, the impugned order dated 13.03.2025 passed by the 1st respondent is set aside and the delay of 108 days in filing the appeal before the 1st respondent is condoned subject to payment of 5% of disputed tax demand before the 1st respondent, within a period of four weeks from the date of receipt of a copy of this order."

"On such payment being made, the 1st respondent is directed to take the appeal on record and pass appropriate orders on merits and in accordance with law, after providing sufficient opportunity to the petitioner, as expeditiously as possible."

Core principles established include the recognition that a bona fide attempt to seek rectification under the statutory provisions can constitute sufficient cause for delay in filing an appeal, and that dismissal of appeals solely on the ground of delay without considering such cause is not justified. The Court also affirmed the practice of imposing conditions, such as partial payment of disputed tax, as a reasonable measure for condoning delay and ensuring compliance.

The final determination was that the delay of 108 days in filing the appeal was condoned subject to the condition of payment of 5% of the disputed tax demand, the impugned dismissal order was set aside, and the appeal was to be adjudicated on merits after due opportunity to the petitioner.

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