Issue:  Whether the period spent in pursuing a rectification application under Section 161 of the GST Act is liable to be excluded while computing limitation for filing an appeal under Section 107. Whether the petitioner in the connected writ petition was entitled to exclusion of time spent in prosecuting a writ petition bona fide before the High Court for the purpose of limitation.

Held that:

The Court held that the controversy regarding exclusion of time spent in pursuing a rectification application under Section 161 of the GST Act while computing limitation for filing an appeal under Section 107 is no longer res integra. Reliance placed upon he Division Bench judgment in M/s Prakash Medical Stores v. Union of India, wherein the Court reaffirmed that where a rectification application is filed within the prescribed period and pursued bona fide, the running of limitation for filing an appeal remains in abeyance during the pendency of such application. Consequently, the period spent in rectification proceedings must be excluded by applying the underlying principle of Section 14 of the Limitation Act, 1963.

Further, the Court held that the petitioner was also entitled to the benefit of Section 14 of the Limitation Act, as the petitioner had initially approached the High Court bona fide and with due diligence, and the writ petition was dismissed as withdrawn with liberty to avail the statutory appellate remedy. The time spent in prosecuting the writ petition before a wrong forum was therefore liable to be excluded while computing limitation for filing the appeal.

Accordingly, the Court set aside the orders passed by the appellate authorities rejecting the appeals as barred by limitation in both writ petitions.

Case name: M/s Vyas Traders, Sawarlal Agarwal Versus Additional Commissioner, Grade -2 (Appeal) -II, State Tax, Meerut And Another dated 03.02.2026

To read the complete judgement 2026 Taxo.online 292