Gujarat High Court Clarifies Limitation for GST Appeals Filed After Rectification

The Gujarat High Court in New Kailash Suppliers Vs State of Gujarat & Ors. has delivered an important ruling on how limitation is to be calculated for filing an appeal under Section 107 of the Goods and Services Tax Act, 2017 when the assessee first resorts to rectification under Section 161.

The Court has set aside the appellate authority’s rejection of a GST appeal as time-barred and has remanded the matter for fresh consideration, holding that the period of limitation has to be computed with reference to the rejection of the rectification application, not merely the date of the original order.

Background of the Dispute

Original Adjudication Order

  • An order was passed against the assessee on 12.08.2024 under the Goods and Services Tax Act, 2017 (referred to as “the Act”).
  • Instead of immediately filing an appeal, the assessee opted to file a rectification application under Section 161 of the Act.

Rectification Application under Section 161

  • The rectification application was filed on 05.11.2024.
  • Under Section 161, such an application is required to be dealt with within a statutory timeframe of three months.
  • In this case, however, the rectification application was actually decided much later, on 19.03.2025, and was rejected.

Note: The delay in deciding the rectification application beyond the statutory three-month window was a pivotal element in the High Court’s analysis on limitation.

Subsequent Appeal under Section 107

  • After the rectification was rejected on 19.03.2025, the assessee filed an appeal against the original order dated 12.08.2024.
  • The appeal was filed in Form GST APL-01 under Rule 108(1) of the Goods and Services Tax Rules, 2017 (referred to as “the Rules”) and under Section 107 of the Act.
  • The appeal was lodged on 25.03.2025, i.e., five days after the rejection of the rectification application.

Order of the Appellate Authority

Rejection on Ground of Limitation

The appellate authority (respondent no. 3) passed an order dated 25.04.2025 rejecting the appeal on the ground of delay.

The reasoning was:

  • The appeal was considered to have been filed beyond the standard limitation period of three months plus a further one month of condonable delay (total 120 days) under Section 107 of the Act.
  • The authority took the stance that it lacked jurisdiction to condone any delay beyond this maximum permissible period.
  • It proceeded on the basis that the limitation must be reckoned strictly from the original order dated 12.08.2024, ignoring the intervening rectification proceedings.

Assessee’s Submissions Before the High Court

Counsel for the assessee, Mr. Apurva Mehta, argued that:

  1. Limitation Starts from Rejection of Rectification

    • Once a rectification application is filed under Section 161, and is decided thereafter, the period of limitation for appeal under Section 107 should commence from the date following the rejection order.
    • Since the rectification application was rejected on 19.03.2025, the assessee contended that limitation should start from 20.03.2025.
    • The appeal filed on 25.03.2025 was thus well within the permissible window counted from the rectification rejection date.

  2. Explanation Provided in Form GST APL-01