Facts of the Case:

The appellant engaged in business under GST registration, was served with a pre-show cause notice under Section 73(5) of the CGST Act, 2025. This was followed by a demand order under Section 74. Aggrieved by the adjudication order, the appellant filed an appeal under Section 107(1) of the CGST Act along with a prayer for condonation of delay.

The Appellate Authority dismissed the appeal as time-barred, holding that it was filed beyond the period of limitation prescribed under Section 107(4) of the Act, which allows a maximum of three months plus an additional one month for sufficient cause. The appellant challenged this order before the High Court which was dismissed by the learned Single Judge on 19 August 2024. The Single Judge relied on the Supreme Court’s rulings in Singh Enterprises v. CCE, Jamshedpur to hold that the limitation period for filing appeals is mandatory and cannot be extended beyond the statutory limit. The appellant, aggrieved by this dismissal, filed the intra-court appeal before the Division Bench of the Calcutta High Court.

Issue:

Whether the time limit for filing appeal under Section 107(4) of the CGST Act, 2017 — which allows filing within three months plus a condonable one month — is mandatory, thereby prohibiting any condonation beyond four months, or directory, enabling the appellate authority to condone delay beyond the prescribed period upon sufficient cause.

Held that:

The Court held that the Supreme Court’s rulings in Singh Enterprises and Hongo India Pvt. Ltd., relied upon by the Single Judge, were based on provisions of the Central Excise Act, 1944, which are materially different from the CGST framework. Hence, the principles laid down in those cases could not automatically govern interpretation under the GST regime, a new tax code with its own structure and objectives.

The Division Bench relied on earlier coordinate bench decisions of the Calcutta High Court in S.K. Chakraborty & Sons v. Union of India and Ram Kumar Sinhal v. State of West Bengal to hold that the time limits in Section 107(4) are directory. Further, the Court observed that a stay order in an appeal before the Supreme Court does not destroy the binding effect of the High Court’s earlier judgment as precedent. The stay operates inter partes and does not amount to a declaration of law under Article 141 of the Constitution.

Accordingly, the Bench held that in appropriate cases, where sufficient cause is shown, the Appellate Authority under Section 107 possesses the power to condone delay beyond the strict four-month limit prescribed under Section 107(4). The impugned orders, both of the Appellate Authority and the Single Judge were set aside.

The matter was remitted to the Appellate Authority to reconsider the prayer for condonation of delay after giving both parties an opportunity to be heard.

Case Name: Ashok Ghosh Versus The State of West Bengal and Ors. dated 04.11.2025

To read the complete judgement 2025 taxo.online 2849