As GST is
entering the 10th year on 01/07/2026, let us change our approach.
The importance of
compliance of the requirements well within the stipulated time is most
important under GST as a stitch in time saves nine. This is exactly the issue
in one case before the Telangana High Court on 15/06/2026 wherein appeal was
preferred before the first appellate authority with condonation of delay. The
OIO was under rectification process which fact was not figured out in the
condonation of delay. The Joint Commissioner (Appeals) rejected the appeal on
limitation ground. 2026 (6) TMI 1001 - TELANGANA HIGH COURT K. Malaxmi Infra
Ventures (India) Private Limited. Versus The Appellate Joint Commissioner of
State Tax, Hyderabad Dated:- June 15, 2026 refers.
The story goes like this. For the financial year
2020-21, a show cause notice was issued on 28/11/2024. As the last date for
adjudication happened to be 28/02/2025, the OIO was passed on 24/02/2025
itself. The taxpayer applied for rectification on 18/04/2025. As the
rectification process was going on, the taxpayer was waiting for the
rectification order. In the meantime, preferred the first appeal on 05/09/2025
with an application for condonation of delay. Most importantly, there were few
justifications furnished for the delay in filing the first appeal but the tax
professional failed to bring it out in the condonation petition that the
rectification was under process as on 05/09/2025, which was the major reason
for such delay. The first appeal was rejected on limitation ground on
23/03/2026 whereas the rectification order was out on 19/12/2025.
Due to rejection of the first appeal on limitation
ground, the taxpayer preferred the writ before the jurisdictional high court
praying for restoration of the appeal as the rectification order was issued
only on 19/12/2025 whereas the condonable time with the first appellate
authority ended on 24/06/2025 as against appeal filed date of 05/09/2025.
The division bench headed by the Chief Justice has set
aside the first appeal order dated 23/03/2026 with liberty to the taxpayer to
submit additional grounds within two weeks from 15/06/2026.
Section 161 of the CGST Act grants the taxpayer a
period of three months for applying such rectification, it would be advisable
to thoroughly scrutinize the OIO to find out as to whether is there any
requirement to apply for rectification under section 161 and if yes, to file
such rectification application accurately bringing all the errors apparent on
record in one go to the notice of the officer who has passed that order. The
language used in section 161 suggest that OIO as well as OIA can be rectified
under this section as the words used are any authority. The rectification order has to be passed
within a period of six months from the date of the order which is sought to be
rectified. Accordingly, once the application is made as per requirements of
Section 161, the taxpayer may simultaneously apply for the first appeal within
three months from the date of OIO to avoid any complications that may arise
later as happened in the above case.
The indirect tax laws are procedure oriented and it is
of utmost importance to ensure that time limits specified under various
sections are strictly adhered at both the ends. The time limits specified for
issuance of SCN as well as for passing OIO under sections 73, 74 as well as 74
A are mandatory and not directory. The time limits for replying to the show
cause notice, for preferring first as well as second appeal are to be done well
within time without taking recourse of condonation. The first appellate authority
may condone only maximum one month and GSTAT may condone only a maximum of
three months subject to sufficient cause being proved.
The journey during last nine years with GST has taught
us lot of lessons which we as a taxpayer, tax professional as well as tax
official must make best use in future so as to minimize the litigation as well
as to improve the quality in all stages. As the GSTAT is fully functional now
and several second appeals under GST are being filed online which has 19,000 e
appeals already, it is time for GST officials to ensure that the orders passed
by them are strong enough to get the orders from GSTAT in favor of Revenue,
irrespective of the fact as to taxpayer or revenue is in appeal. This approach
shall definitely improve the quality of adjudication as well as help in
reduction in avoidable litigation.
On the taxpayer part, it may be ensured that all
activities such as furnishing the
replies wherever required, filing all the applicable GST returns
accurately and in time shall allow time to the taxpayer to focus on business
improvement as ASMT 10 DRC 01 are all issued only based on differences arising
from GST returns.
As GST enters the tenth year shortly, let us hope for
better days in future as GST Council is positive in their activities like rate
rationalization etc. As the decisions from GSTAT are expected to be settling
the matter rather than remand, the same shall pave way for the GST officials to
pass orders in future in line with the stand taken by the GSTAT on respective
issues.
Once GSTAT starts passing orders shortly, the writs
before high courts shall further come down and the condonation of delay is
maximum one month at first appeal and three months before GSTAT with sufficient
cause. Hence, it is suggested to file appeal wherever required without seeking
any condonation by preferring he appeal within permissible time.