DISMISSAL OF APPEAL AT APL-02 STAGE, Goods and Services Tax - GST

[Sadanand Bulbule]

In terms of Section 107(1), threes months time is given to file an appeal against any order/decision.Further one month time is given under Section 107(9) to admit the appeal petition filed beyond three months, if the Appellate Authority is satisfied for the cause demonstrated by the appellant.

Contrary to the above legal position, some Appellate Authorities, without considering the genuine reasons for condonation of delay under Section 107[9], are dismissing the appeals by indicating the reason- "filed beyond prescribed period" while issuing APL-02 itself. Meaning, there is no separate & speaking order for dismissal.

Despite the mandatory provision of Section 75[4] and umpteen number of binding rulings of the High Courts/Apex Court, no opportunity of personal hearing is provided. This is clear violation of PNJ.

Are such cases fit to restore appeal petitions under Section 107[1] via 161 or to approach the High Court under Article 226? Second option is very expensive and time consuming process.

Posts / Replies

[YAGAY andSUN]

Dear Sir,

Your concern touches on a recurring procedural irregularity that violates the statutory mandate under the CGST Act as well as established principles of natural justice (PNJ). Let’s address the issue in strict legal terms:

Legal Framework Analysis

Section 107(1), CGST Act, 2017:

“Any person aggrieved by any decision or order passed under this Act…may appeal…within three months from the date on which such decision or order is communicated…”

Section 107(4):

Mandates an opportunity of being heard when requested or when adverse order is proposed.

Section 107(9):

Allows condonation of delay up to one further month, if the Appellate Authority is satisfied that the appellant was prevented by sufficient cause.

Violation of Section 107(9) and Section 75(4):

Mechanical dismissal of appeals as “barred by limitation” without speaking order or consideration of grounds for delay violates the doctrine of discretionary satisfaction under Section 107(9).

Non-grant of personal hearing or refusal to pass a reasoned order amounts to a breach of Section 75(4) of the CGST Act and Article 14 of the Constitution.

The issuance of APL-02 with a non-speaking rejection, in lieu of a formal speaking order, contravenes the procedural mandate and well-settled jurisprudence including:

• Kumaran Silks v. Appellate Deputy Commissioner (ST) [(Madras HC)] – Personal hearing is mandatory even in appellate rejection.
• Mohinder Singh Gill v. Chief Election Commissioner [(1978) 1 SCC 405] – Administrative decisions must stand on their own reasoning, not supplemented later.

Remedy Options:

Option 1: Filing Rectification under Section 161 (Restoration)

Section 161 empowers rectification of errors apparent on record, whether on motion of the authority or on application by the affected person.

The failure to exercise discretion under Section 107(9) and absence of a speaking order is an error of jurisdictional nature, and thus, qualifies as an "error apparent."

Therefore, you may seek restoration of appeal on the grounds that:

• The Appellate Authority failed to pass a reasoned and speaking order.
• The authority refused to exercise jurisdiction under Section 107(9), which is permissible and mandatory upon sufficient cause.

Suggested Relief:

File a rectification application under Section 161 read with principles of natural justice and judicial discipline, requesting restoration of the appeal and fresh consideration on merits.

Option 2: Writ Petition under Article 226

A writ under Article 226 is maintainable against such arbitrary and non-speaking orders.

However, as you rightly stated, it is costly and time-consuming, and should be used only when the rectification application under Section 161 is denied or not acted upon within a reasonable time.

Conclusion (in legal language):

1. The rejection of appeals via APL-02 without a speaking order, and without examining the plea for condonation under Section 107(9), is patently illegal. Such mechanical action not only defeats the statutory right to appeal, but also violates Section 75(4) and the principles of natural justice.
2. Such cases are fit for rectification and restoration under Section 161, and writ jurisdiction under Article 226 may be invoked only as a secondary recourse. The Appellate Authority’s inaction to pass a reasoned order constitutes a jurisdictional error and breach of quasi-judicial duty.

Appendix - 1

Below is a professionally drafted sample application under Section 161 of the CGST Act for restoration of an appeal wrongly dismissed without a speaking order or opportunity of hearing:

Application for Rectification under Section 161 of CGST Act, 2017

To
The Appellate Authority
[Office of the Appellate Authority / Designation]
[Address]
[City, State, PIN]

Subject: Application under Section 161 of the CGST Act, 2017 for rectification of error apparent on record in relation to dismissal of appeal vide APL-02 – Request for restoration of appeal.

Reference:

• GSTIN: [Your GSTIN]
• Order-in-Original No.: [Insert No. and Date]
• APL-01 filed on: [Date]
• APL-02 rejection dated: [Date]
• APL Reference Number: [Insert, if available]

Respected Sir/Madam,

The undersigned submits the following application for your kind consideration:

1. That I had filed an appeal in Form APL-01 against the above-referenced Order-in-Original passed by the adjudicating authority, within the extended limitation period as provided under Section 107(9) of the CGST Act, 2017, along with a detailed prayer seeking condonation of delay.
2. That without considering the genuine grounds of delay and without providing any opportunity of being heard as required under Section 75(4), the appeal was mechanically rejected as "time-barred" via Form APL-02. The said rejection does not constitute a speaking order as mandated under law, and does not reflect any exercise of judicial discretion under Section 107(9).
3. That it is a settled principle of law that the right of appeal is a substantive statutory right, and discretionary powers under Section 107(9) must be exercised upon objective satisfaction of the reasons stated for delay. The denial of such opportunity and absence of a reasoned order amount to an error apparent on the face of record within the scope of Section 161 of the Act.
4. That as per the principles laid down by Hon'ble Courts including in Mohinder Singh Gill v. Chief Election Commissioner (1978) 1 SCC 405 and multiple GST-related rulings, non-speaking administrative actions are liable to be set aside for violating natural justice and procedural fairness.

Prayer

In view of the above, it is respectfully prayed that:

• The impugned rejection of appeal vide APL-02 may kindly be rectified under Section 161 of the CGST Act, 2017;
• The appeal may be restored to its original number, and the application for condonation of delay may be considered on merits;
• An opportunity of personal hearing be granted in accordance with Section 75(4) prior to any decision on the maintainability of the appeal.

I/We shall remain obliged for your kind and lawful consideration of this application.

Place: [City]
Date: [DD/MM/YYYY]
Yours faithfully,
[Your Name]
[Designation, if applicable]
[Name of Taxpayer/Entity]
[GSTIN]
[Email ID] | [Phone Number]

 

[Sadanand Bulbule]

Dear Yagay Sir
Thank you so much for endorsing my expressions, besieds providing judicial rulings and template of application for ready use. These days your replies are also accompanied by purposeful comments and suggestions. 
Let the querists harvest due benefits from TMI D-Forum. 
Regards 

[Sadanand Bulbule]

* besides 

[YAGAY andSUN]

Thanks Sir.