HC Directs Condonation of Delay in GST Appeal Due to Bona Fide Litigation Time

Case Details: Shaileshbhai Kanjibhai Patel vs. State Tax Officer - [2025] 173 taxmann.com 674 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & D.N. Ray, JJ.
• Sahil J Rao, Adv. for the Petitioner.
• Ms Shrunjal Shah, AGP & Ankit Shah, for the Respondent.

Facts of the Case

The petitioner is engaged in the business of manufacturing and trading brass products. The petitioner received a show-cause notice, which alleged that goods were purchased from a suo-moto cancelled dealer that was found to be bogus. As a result, the Input Tax Credit (ITC) availed under Section 16(2) of the CGST Act was required to be reversed. The petitioner filed a response to the notice, submitting relevant documents, including purchase invoices, e-way bills, weight slip receipts, and bank payment details. However, the Order-in-Original was issued, confirming the reversal of ITC and imposing penalties under Section 74 of the CGST Act. Dissatisfied with the order, the petitioner filed a Special Civil Application challenging both the Order-in-Original and the constitutionality of Section 16(2)(c) of the CGST Act. The Court disposed of the application, directing the petitioner to seek an alternative remedy under Section 107 of the CGST Act. The petitioner then filed an appeal before the Appellate Authority, but the appeal was rejected due to a delay in filing. The petitioner then approached the Gujarat High Court, requesting the condonation of the delay, citing on the time spent before the Court.

High Court Held

The Hon’ble Gujarat High Court held that the time spent by the petitioner before the Court should be considered bona fide by the Appellate Authority for condoning the delay in filing the appeal. The Court quashed the Order-in-Appeal and directed the Appellate Authority to reconsider the appeal, allowing the delay to be condoned. The matter was remanded to the Appellate Authority to decide the appeal on its merits. The appeal should not be rejected solely on the grounds of delay. The Court also directed that this process be completed within twelve weeks from the receipt of the order. The petition was disposed of accordingly.