• Dated 10^th November, 2025

Time Limit for GST Appeals under Section 107(4) Held Discretionary, Not Mandatory: Calcutta High Court

Brief Facts of the Case

The assessee was served with an adjudication order under Section 74 of the Central Goods and Services Tax Act, 2017 ("CGST Act"). Aggrieved, the assessee preferred an appeal before the Appellate Authority under Section 107(1) of the Act along with a request for condonation of delay. The Appellate Authority, however, dismissed the appeal on the ground that it was filed beyond the maximum limitation period prescribed under Section 107(4) of the Act.

A writ petition challenging the said rejection was dismissed by the Single Judge, relying on Supreme Court decisions under the Central Excise Act, which held that delay beyond the statutory limit cannot be condoned. The assessee preferred an appeal before the Division Bench of the High Court.

Assessee's Contention

The assessee argued that the time limit prescribed under Section 107(4) of the CGST Act is directory, not mandatory, and that the Appellate Authority has inherent power to condone the delay if sufficient cause is shown. It was submitted that the earlier Supreme Court rulings under the Central Excise Act were based on a different statutory scheme and cannot automatically apply to GST matters.

Reliance was placed on coordinate bench decisions holding that the timelines under Section 107(4) are directory and that the Limitation Act principles would apply. It was further contended that even though one such judgment was stayed by the Supreme Court, the stay order only binds the parties to that case and does not dilute the precedential value of the decision.

Department's Contention

The Department maintained that the time limit under Section 107(4) of the CGST Act is mandatory, as the provision explicitly restricts the condonable period. It was argued that once the maximum permissible period lapses, the appellate authority loses jurisdiction to entertain the appeal. The Department emphasized that judicial discipline requires adherence to settled Supreme Court precedent, which has consistently disallowed condonation beyond the prescribed limit in tax matters.

Court's Decision

The Division Bench held that the time limit under Section 107(4) of the CGST Act (which prescribes the period for filing appeals and allows the Appellate Authority to condone delay for a limited period) must be read in the context of the statutory scheme and earlier High Court precedents; the Supreme Court decisions relied upon by the lower authorities - Singh Enterprises v. Commissioner of Central Excise and Commissioner of Customs & Central Excise v. Hongo India - were rendered under the Central Excise Act, 1944 and therefore are not directly dispositive of the GST regime.

Crucially, the Court held that there is no express exclusion of the Limitation Act, 1963 in Section 107(4) and therefore the general condonation power under Section 5 of the Limitation Act (permitting admission of appeals/applications after the prescribed period on showing "sufficient cause") is applicable unless a special law clearly negatives it. The Court relied on the saving/interaction principles in Section 29(2) of the Limitation Act, which governs how the Limitation Act operates where a special law prescribes a different period — and found that the CGST provision does not, by necessary implication, exclude Section 5.

Applying the above, and following coordinate-bench authority that treated Section 107(4) as directory, the Bench held that the Appellate Authority retains power to condone delay in appropriate cases where sufficient explanation is furnished, and therefore set aside the orders refusing condonation and remanded the matter for fresh consideration.

Our Comments

The judgment provides important relief to taxpayers by holding that delay in filing GST appeals can be condoned beyond the statutory period when justified. It highlights that procedural limit should not override substantive justice and clarifies that interim stays do not erase the precedential value of earlier rulings. However, as the issue is pending before the Supreme Court, the final legal position remains subject to further judicial determination.

Ashok Ghosh Vs. State of West Bengal (MAT 82 of 2025)

Author: Sneha Nandi