Facts of the Case

The petitioner, M/s. Bheemaneni Projects, a works-contract firm headed by its 72-year-old Managing Partner, engaged in running buses and ambulance services besides supplying goods under the GST Act, was subjected to a surprise visit by the Deputy Assistant Commissioner (ST) on 21.10.2020, followed by proceedings for alleged suppression of turnover for the period 07/2017 to 03/2020. After part-payment of penalty under threat of arrest, and further show cause notices during the COVID period, the adjudicating authority passed the assessment order on 13.04.2022, served on the firm's accountant, who was then unable to inform the partners as he himself suffered COVID for seven months. The appeal was filed on 01.11.2022 — 112 days beyond the condonable period — and was rejected at admission by the appellate authority on 07.01.2023. A garnishee notice for Rs.6,20,05,487 was also issued to third parties, while the order itself showed a disputed amount of Rs.6,54,67,099.

Issues Involved

  1. Whether the 112-day delay in filing the appeal against the assessment order, attributable to the firm's accountant's prolonged COVID illness and the elderly Managing Partner's lack of knowledge of the order, could be condoned by the writ court, given that the appellate authority under Section 107 lacks power to condone delay beyond one month.

Petitioner's Arguments

  • The assessment order was served on the firm's accountant, who himself suffered COVID for seven months and could not inform the partners; neither the Managing Partner nor other partners had knowledge of the order until much later.
  • The disputed tax of over Rs.6.5 crore was huge, and no prudent person would remain silent without appealing such a demand — the delay was not deliberate but a result of genuine hardship during the pandemic.
  • The petitioner should be given an opportunity to contest the matter in appeal, if necessary on terms including deposit of a percentage of the disputed tax.

Respondent's Arguments

  • The appellate authority had rightly rejected the appeal at the admission stage since it was filed beyond the condonable period of limitation under Section 107, and there were no grounds to interfere with that rejection.

Court Order / Findings

  • Under Section 107(1) of the Act, the period for filing an appeal is three months, extendable by one further month under sub-section (4) on sufficient cause; even after deducting this extension, a delay of 81 days remained.
  • Relying on the medical certificate placed on record (unrebutted by contrary material) documenting the accountant's prolonged COVID illness, and noting the Managing Partner's advanced age and lack of knowledge of the order's service, the Court found the petitioner had substantiated her plea of inability to file the appeal in time, as required by the Supreme Court's ruling in Assistant Commissioner (CT) LTU, Kakinada v. M/s. Glaxo Smith Kline Consumer Health Care Ltd.
  • Since the right of appeal is a statutory right that cannot be allowed to die where genuine inability is shown, the Court condoned the 112-day delay in filing the appeal, subject to the petitioner depositing 20% of the disputed tax (in addition to any amount already deposited) and paying costs of Rs.10,000 to the High Court Legal Services Committee, within six weeks.
  • On compliance, the appellate authority was directed to admit and dispose of the appeal on merits after hearing both parties, expeditiously and in accordance with law.

Important Clarification

Even a substantial delay well beyond the one-month outer limit for condonation under Section 107(4) of the CGST Act can be condoned by a writ court under Article 226 where the assessee substantiates, with supporting material such as a medical certificate, a genuine inability to file the appeal in time — courts will balance this against revenue protection by conditioning relief on a pre-deposit (commonly around 20% of the disputed tax) and costs, rather than granting an unconditional extension.

Sections Involved

  • Section 107, CGST Act, 2017 – prescribes the appeal period and the appellate authority's limited power to condone delay by one further month beyond the three-month limitation.
  • Article 226, Constitution of India, 1950 – invoked for writ relief where a statutory appeal is otherwise time-barred but genuine hardship is shown.

Decision – In Favour of

In favour of the Assessee, conditionally — the delay was condoned and the appeal directed to be heard on merits, subject to a 20% pre-deposit of the disputed tax and costs, leaving the substantive tax dispute open for the appellate authority to decide.

Case Details

High Court of Andhra Pradesh at Amaravati; Writ Petition No.2706 of 2023; Coram: Hon'ble Sri Justice U. Durga Prasad Rao and Hon'ble Smt. Justice Venkata Jyothirmai Pratapa; Order dated 04.07.2023; CNR not indicated on the order copy.

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