GSTAT and Delay Condonation Under Section 107(4) of the CGST Act: Navigating Conflicting High Court Views

Introduction

One of the most consequential procedural questions before the GST Appellate Tribunal (GSTAT) today concerns its power — or lack thereof — to condone delays in appeals that were originally filed before the first Appellate Authority beyond the statutory time limits prescribed under the CGST Act. The answer is neither straightforward nor uniform across jurisdictions, as High Courts across India have arrived at diametrically opposite conclusions. Understanding where GSTAT fits within this contested legal landscape is essential for every practitioner advising an assessee in a time-barred GST appeal.

Statutory Framework: What Section 107(4) Provides

Section 107(4) of the Central Goods and Services Tax Act, 2017 (CGST Act) prescribes the timeline for filing an appeal before the first Appellate Authority. The provision allows an appeal to be filed within three months from the date of communication of the order, with a further one-month condonation window available upon the authority being satisfied that there was sufficient cause for the delay. This creates an aggregate outer ceiling of four months, beyond which the statute, on its face, does not expressly authorize the Appellate Authority to entertain appeals.

The interpretive controversy centres on whether this four-month cap is absolute and jurisdictional in character, or whether Section 5 of the Limitation Act, 1963 — which enables condonation of delay upon showing sufficient cause — can be read into the scheme through Section 29(2) of the Limitation Act.

GSTAT's Appellate Powers Under Section 113(1) of the CGST Act

Before examining the delay condonation debate, it is useful to appreciate the breadth of GSTAT's jurisdiction. Section 113(1) of the CGST Act empowers GSTAT, while disposing of a second appeal, to:

"…pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the Appellate Authority… with such directions as it may think fit, for a fresh adjudication or decision…"

This is a wide appellate power. When an assessee challenges the first Appellate Authority's rejection of a delay condonation application on the ground that the delay exceeded the permissible period, GSTAT is not being called upon to expand its own limitation powers. Rather, it is being asked to determine whether the lower authority committed an error of law or improperly exercised its discretion — a function that falls squarely within ordinary appellate review.

Accordingly, where the delay before the first Appellate Authority fell within the four-month aggregate ceiling but was rejected without a reasoned or judicious application of mind, GSTAT can set aside the erroneous order and remand the matter under Section 113(1) for fresh consideration. There is no jurisdictional barrier in this scenario.

The genuinely contested terrain arises when the delay exceeds the four-month outer cap.

View 1 — Section 5 of the Limitation Act Is Available Even to Statutory Authorities

The Calcutta High Court has consistently taken the position that Section 107 of the CGST Act neither expressly nor impliedly excludes the operation of Section 5 of the Limitation Act, 1963. Because Section 29(2) of the Limitation Act makes Section 5 applicable unless specifically excluded, the Appellate Authority retains the discretion to condone delays even beyond the four-month cap.

The Division Bench of the Calcutta High Court articulated this position in S.K. Chakraborty & Sons v. Union of India, observing: