• Dated 28^nd July, 2026

Calcutta High Court Holds Delay Beyond Section 107(4) of the CGST Act Can Be Condoned in Appropriate Cases

Brief Facts

The Appellant, aggrieved by the adjudication order, preferred an appeal under Section 107 of the CGST Act along with an application seeking condonation of delay. The Appellate Authority rejected the appeal on the ground that it had been filed beyond the maximum period prescribed under Section 107. The writ petition challenging the said order was also dismissed by the learned Single Judge by relying upon the decisions of the Supreme Court in Singh Enterprises and Hongo India. Aggrieved thereby, the Appellant preferred the present intra-court appeal before the Division Bench.

Appellant's Contentions

The Appellant contended that the decisions in Singh Enterprises and Hongo India were rendered under the Central Excise Act, 1944 and, therefore, had no application to appeals governed by Section 107 of the CGST Act. It was further submitted that the Division Bench of the Calcutta High Court in S.K. Chakraborty & Sons had categorically held that the time limit prescribed under Section 107(4) is directory and not mandatory. The Appellant argued that although the operation of the said judgment had been stayed by the Supreme Court, such stay did not obliterate its precedential value. Reliance was also placed on Ram Kumar Sinhal and Pijush Kanti Chowdhury to contend that an interim stay merely binds the parties and does not dilute the ratio laid down in the judgment.

Department's Contentions

The Department submitted that the judgment in S.K. Chakraborty was presently under challenge before the Supreme Court and its operation had been stayed. Accordingly, it was contended that the Appellate Authority had rightly refused to condone the delay beyond the statutory period prescribed under Section 107 of the CGST Act.

Held

The Division Bench allowed the appeal and held that the decisions in Singh Enterprises and Hongo India, rendered under the Central Excise Act, 1944, were not applicable to the issue arising under Section 107 of the CGST Act. The Court reiterated that the limitation prescribed under Section 107(4) is directory and not mandatory, as held in S.K. Chakraborty. It further observed that the mere stay of the operation of S.K. Chakraborty by the Supreme Court does not deprive the judgment of its precedential value and that its ratio continues to bind coordinate Benches until it is set aside. Accordingly, the Court held that the Appellate Authority has the power to condone delay beyond the period prescribed under Section 107(4) in appropriate cases, subject to the appellant furnishing a satisfactory explanation. Consequently, the orders of the learned Single Judge and the Appellate Authority were set aside, and the matter was remanded to the Appellate Authority for fresh consideration of the application for condonation of delay after granting an opportunity of hearing to the parties.

BTA Comment

This judgment strengthens the view consistently taken by the Calcutta High Court that the limitation prescribed under Section 107(4) of the CGST/WBGST Act is directory and not mandatory. The ruling also clarifies that the mere grant of an interim stay by the Supreme Court does not erase the precedential value of a High Court judgment unless it is ultimately reversed. The decision is likely to provide significant relief to taxpayers whose statutory appeals have been rejected solely on the ground of delay and reinforces the discretionary power of the Appellate Authority to condone delay in deserving cases upon sufficient cause being shown.

Case Reference: Ashok Ghosh v. State of West Bengal & Ors., MAT 82 of 2025 (Calcutta High Court, Judgment dated 04.11.2025)

Author: Aindrila Ghosh

Edited by: Madhurima Bose