Facts of the Case

M/s. Shami Industries challenged an assessment order dated 26 February 2025 in Form GST DRC-07 for the tax period 2020-2021, passed pursuant to a show cause notice in Form DRC-01 dated 25 November 2024. The petitioner had in fact replied to the show cause notice and appeared for the personal hearing, but nonetheless suffered an adverse order. By the time it sought to appeal, the full 120-day window under Section 107 (90 days plus 30 condonable days) had expired on 26 June 2025, with only a marginal delay thereafter, prompting recourse to the High Court to permit a belated appeal.

Issues Involved

  1. Whether a marginal delay beyond the maximum condonable period under Section 107 of the GST enactments, in a case where the taxpayer had actively contested the show cause notice, warrants the High Court's intervention to permit a belated appeal.
  2. What conditions should attach to such relief.

Petitioner's Arguments

  • The petitioner had already replied to the show cause notice and participated in the personal hearing, showing bona fide engagement with the proceedings rather than indifference; the resultant delay in filing the appeal was only marginal.

Respondent's Arguments

  • No specific opposition was recorded beyond the fact that the 120-day limitation period, inclusive of the condonable extension, had already lapsed.

Court Order / Findings

  • The Court noted that this was a case of only marginal delay beyond the appeal period and found it appropriate to come to the petitioner's rescue.
  • It directed that, subject to the petitioner depositing 25% of the disputed tax in cash or through the electronic cash ledger within 15 days, the petitioner would be permitted to file the appeal within that time.
  • On such deposit and timely filing, the Appellate Authority was directed to consider and dispose of the appeal on merits as expeditiously as possible, after granting a hearing to the petitioner.

Important Clarification

  • Where the delay in filing a GST appeal beyond the Section 107 limitation window is only marginal, and the taxpayer has shown bona fide engagement with the adjudication proceedings (reply filed, hearing attended), the Madras High Court readily grants conditional relief permitting the belated appeal.
  • The standard conditioning mechanism in such cases is an enhanced pre-deposit (here 25%, higher than the ordinary 10%) rather than an unconditional condonation of delay.

Sections Involved

  • Section 107, respective GST enactments – prescribes the limitation period (with a condonable extension) and pre-deposit requirement for filing a first appeal.
  • Form GST DRC-01 and DRC-07 – the show cause notice and summary order forms under challenge.

Decision – In Favour of

The decision is in favour of the assessee, permitting the belated appeal to be filed and heard on merits, subject to a 25% pre-deposit within a fixed time.

Case Details

Court: Madras High Court, Madurai Bench. Case No.: W.P.(MD) No. 19940 of 2025 & W.M.P.(MD) No. 15361 of 2025. Coram: Hon'ble Mr. Justice C. Saravanan. Date of Order: 23 July 2025.

Link to Download the Order

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