Allahabad HC Allows Limitation Relief For GST Appeals Filed After Rectification

(MENAFN- KNN India) New Delhi, Dec 27 (KNN) The Allahabad High Court has held that the benefit of Section 14 of the Limitation Act can be extended to appeals filed under Section 107 of the Goods and Services Tax (GST) Act, provided a rectification application under Section 161 of the GST Act was filed within the prescribed limitation period.

Limitation Periods Under GST Law
Under the GST Act, appeals under Section 107 must be filed within three months of the order, with a one-month condonable extension, while rectification applications under Section 161 must also be filed within three months.

A division bench of Justice Saumitra Dayal Singh and Justice Vivek Saran held that although appeal and rectification limitation periods normally run concurrently, filing a rectification application within time suspends the appeal limitation until the rectification is decided.

“If, before expiry of three months, an application is filed under Section 161 of the Act, the running of limitation to file appeal would be suspended from the date of filing of such application till its disposal,” the Court observed.

Section 14 to Be Applied Liberally
Citing the Supreme Court's ruling in M.P. Steel Corporation, the High Court held that Section 14 of the Limitation Act, being a beneficial provision, must be interpreted liberally, and that its underlying principle applies where a rectification application is filed bona fide and in good faith within limitation.

The only exception, the Court clarified, would be cases where the rectification application itself is filed beyond the limitation period prescribed under Section 161 of the GST Act.

Facts of the Case
In this case, an ex parte order was passed on April 23, 2024. The petitioner filed a rectification application on May 23, 2024, which was rejected on October 22, 2024, and subsequently filed an appeal on November 29, 2024 that was dismissed as time-barred.

Challenging this, the petitioner sought exclusion of the time spent on rectification by invoking Section 14 of the Limitation Act. The High Court held that the rectification application was filed within limitation and the appeal within three months of its rejection.

It therefore allowed the writ petition, restored the appeal, and clarified that taxpayers acting in good faith by pursuing rectification are entitled to relief on limitation under GST.

(KNN Bureau)

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