Simplified Explanation of the Judgment
The Patna High Court recently dealt with a case concerning the cancellation of GST registration and the rejection of an appeal filed beyond the statutory deadline. This case sheds light on the importance of adhering to procedural timelines under the Bihar Goods and Services Tax (BGST) Act, 2017.
The petitioner in this case was a proprietorship firm engaged in the granite and marble trade. The GST registration of the firm had been cancelled by the tax department, and the petitioner attempted to challenge the cancellation by filing an appeal before the Appellate Authority. However, the appeal was filed more than seven months after the prescribed time limit.
Under Section 107(4) of the BGST Act, a person aggrieved by an order must file an appeal within three months from the date of communication of the decision or order. The appellate authority can condone a further delay of up to one additional month if it is satisfied that the delay was due to sufficient cause. In this case, the petitioner delayed filing the appeal by over seven months—far beyond the four-month maximum limit.
The petitioner argued that the delay was not intentional and was caused by health issues. Moreover, it was contended that the petitioner had cleared all pending tax liabilities and that the cancellation had resulted in serious business disruption. Therefore, the court was requested to exercise its writ jurisdiction to direct the appellate authority to condone the delay and restore the GST registration.
The respondents, represented by the State of Bihar and tax authorities, contended that the appellate authority had correctly dismissed the appeal for being time-barred. They also pointed out that similar cases had been dealt with earlier by the Patna High Court and the Delhi High Court, where the courts upheld the statutory limitation periods and dismissed delayed appeals.
Ultimately, the High Court dismissed the writ petition. It held that the case was squarely covered by its earlier ruling in Maruti Store v. State of Bihar (CWJC No. 2441 of 2024) and the Delhi High Court’s ruling in Addichem Specialty LLP v. Special Commissioner (W.P. (C) 14279 of 2024). Both these decisions had reiterated that appellate authorities are bound by statutory timelines and cannot condone delays beyond what the law permits.
Significance or Implication of the Judgment
This decision holds critical significance for businesses operating under GST in Bihar and beyond. It reaffirms the legal position that statutory deadlines under the BGST Act must be strictly followed. Businesses seeking to challenge tax department actions—such as cancellation of registration—must act swiftly and within the prescribed timeframes.
The judgment discourages reliance on writ petitions as a backdoor remedy to bypass statutory deadlines. It also sends a clear signal to tax consultants, accountants, and businesses that they must be vigilant and proactive in filing appeals or applications within the time allowed under the law.
For the government, the decision supports administrative efficiency and reduces the burden on appellate authorities by discouraging time-barred litigation.
Legal Issue(s) Decided and the Court’s Decision with reasoning
- Whether the appellate authority erred in rejecting the GST appeal for delay beyond statutory limit:
- Court’s Finding: No error. The appellate authority rightly rejected the appeal under Section 107(4) of the BGST Act, as the maximum condonable delay is one additional month beyond the original three-month limit.
- Whether the High Court can invoke writ jurisdiction to condone such delay:
- Court’s Finding: No. The High Court refused to entertain the writ petition and upheld the rule of law that statutory limitations must be respected.
- Whether medical reasons or business hardship justify delay beyond statutory limit:
- Court’s Finding: No. Although sympathetic, the Court held that such grounds cannot override legislative mandates.
Judgments Referred by Parties
- Addichem Specialty LLP v. Special Commissioner 1, Department of Trade and Taxes & Anr., W.P. (C) 14279 of 2024, CM APPL. 59773 of 2024, Delhi High Court, dated 16.12.2024.
Judgments Relied Upon or Cited by Court
- Maruti Store v. State of Bihar and Others, CWJC No. 2441 of 2024, Patna High Court, dated 27.02.2024.
- Addichem Specialty LLP v. Special Commissioner 1, Department of Trade and Taxes & Anr., W.P. (C) 14279 of 2024, Delhi High Court, dated 16.12.2024.
Case Title
M/s Geosence Granite and Marble through its proprietor v. State of Bihar & Others
Case Number
CWJC No. 18204 of 2024
Coram and Names of Judges
Hon’ble Mr. Justice P. B. Bajanthri
Hon’ble Mr. Justice Sunil Dutta Mishra
Names of Advocates and who they appeared for
Mr. Gopal Prasad Singh, Advocate — for the Petitioner
Mr. Standing Counsel (11) — for the Respondents
Link to Judgment
6c7b20bc-af77-49b2-aea1-3d197307a494.pdf
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