The recent ruling by the Hon’ble Madras High Court in the matter of M/s. Great Heights Developers LLP v. Additional Commissioner Office of the Commissioner of CGST & Central Excise, Chennai [Writ Petition No. 1324 of 2024 dated February 01, 2024], marks a significant development in the realm of tax law. The court, in its decision, addressed the issue of whether a medical reason constitutes valid grounds for condoning a delay in filing an appeal before the Appellate Authority under the CGST Act.
The case revolved around M/s. Great Heights Developers LLP (“the Petitioner”), who received a Show Cause Notice (“the SCN”) followed by an Assessment Order dated August 14, 2023 (“the Impugned Order”) imposing interest and penalty under Section 73(9) and 73(7) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). Despite the statutory requirement to file an appeal within 90 days, the Petitioner failed to do so due to the diagnosis of septic shock, resulting in an inability to pursue the appeal process. Consequently, the deadline for filing the appeal, along with an application to condone the delay, expired on December 16, 2023.
Challenging the Impugned Order, the Petitioner approached the court seeking relief.
The pivotal issue before the court was whether a medical condition could be deemed a valid reason for condoning the delay in filing an appeal before the Appellate Authority.
In its ruling, the Hon’ble Madras High Court, while acknowledging the limitations imposed by Section 107 of the CGST Act, observed that the Appellate Authority lacks the power to condone delays beyond 120 days. However, considering the circumstances of the case where the delay amounted to only 24 days and the Petitioner provided compelling reasons for the delay, including the payment of the entire tax liability, the court held that the appeal should be heard on its merits.
Furthermore, the court directed the Appellate Authority to expeditiously receive and dispose of the appeal within a maximum period of ten days from the receipt of the court’s order.
This decision underscores the judiciary’s recognition of genuine hardships faced by taxpayers and emphasizes the need for a pragmatic approach in dealing with such cases. It also reaffirms the principle of providing equitable relief to taxpayers when warranted by the circumstances.
In conclusion, the ruling sets a precedent for considering medical reasons as valid grounds for condoning delays in filing appeals under the CGST Act, thereby ensuring fairness and justice in tax adjudication processes.