Rejection of Delayed GST Appeal Without Hearing Unsustainable | HC

Case Details: Watech RO Systems Pvt. Ltd. vs. State of Gujarat - [2026] 182 taxmann.com 885 (Gujarat)

Judiciary and Counsel Details

• A.S. Supehia & Pranav Trivedi, JJ.
• Akshay A Vakil & Samirkumar I. Siddhapuria for the Petitioner.
• Ms Nimisha Parekh, Asstt. Govt. Pleader for the Respondent.

Facts of the Case

The petitioner, a GST-registered manufacturer and trader of RO systems and parts, was issued a show cause notice (SCN) alleging excess ITC availed in delayed GSTR-3B returns. It furnished explanations pursuant to the SCN; however, the jurisdictional officer under CGST disallowed major ITC on timing and matching grounds and issued a demand order in Form DRC-07 for tax, interest, and penalty. It preferred to appeal under Section 107 of the CGST Act, with an 18-day delay. The appeal was rejected as time-barred without considering the plea for condonation of delay or affording an opportunity to be heard. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the impugned order rejecting the appeal without considering the plea of delay and without affording an opportunity of hearing was unsustainable in view of the principles of natural justice. The Court recorded the statement made on behalf of the revenue that the impugned order would be withdrawn and a fresh order would be passed after granting the petitioner an opportunity to be heard. It was observed that the Appellate Authority under Section 107 of the CGST Act and the Gujarat GST Act is required to deal with all contentions raised and pass a reasoned order. The directions were issued to pass a fresh order after due opportunity of hearing and after addressing all contentions raised by the petitioner, and to complete the exercise within twelve weeks.