The Gujarat High Court, in a significant ruling under GST law, held that an appellate authority cannot reject a delayed appeal mechanically without granting the taxpayer an opportunity of hearing. In this case, the petitioner had filed an appeal with a short delay of 18 days against a demand order for excess Input Tax Credit (ITC). However, the appellate authority dismissed the appeal as time-barred without considering the plea for condonation of delay or addressing the petitioner’s contentions. The High Court found such rejection to be unsustainable and remitted the matter back for fresh adjudication after providing a proper hearing.
Facts
- A taxpayer received a demand order under GST for excess input tax credit (ITC).
- The taxpayer filed an appeal against the demand, but after the statutory limitation period (beyond the 90‐day period and condonable 30 days).
- The statutory appellate authority dismissed the appeal as time-barred without considering the taxpayer’s contentions on delay or providing an opportunity of hearing.
Contentions Raised
- The taxpayer argued that although there was delay, the appellate authority should have provided an opportunity to explain the delay and heard all contentions before rejecting the appeal as time-barred.
High Court Decision
- The Gujarat High Court held that:
- Rejecting the appeal without granting a hearing opportunity on the delay plea was unsustainable in law.
- An appellate authority must consider the explanations offered for delay and afford a hearing before dismissing an appeal purely on limitation grounds, particularly where the taxpayer raises plausible reasons and seeks fair hearing.
- Consequently, the impugned appellate order was set aside and the matter remitted back to the revenue authority for fresh consideration after giving the taxpayer an opportunity of hearing.
- The Court directed that the appellate authority should decide the appeal on merits — addressing all issues raised by the appellant and after hearing them — within a specified time frame (e.g., 12 weeks).
Legal Principle
- Even where there is delay in filing a statutory appeal, procedural fairness and principles of natural justice require that the appellate authority must consider an explanation for the delay and afford an opportunity of hearing before dismissing the appeal outright as time-barred.
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This prevents mechanical dismissal and ensures that substantive rights of the taxpayer to a fair hearing are upheld.