The Patna High Court has clarified how delayed GST appeals can still be heard on merits when the Central Government’s special appeal window is properly used. In a writ petition under Article 226, the petitioner had challenged the dismissal of its statutory appeal under Section 107 of the Bihar Goods and Services Tax Act, 2017 (BGST Act) on the ground of limitation. The Court noted that ordinarily, Section 107 allows three months to appeal and up to one further month that may be condoned upon showing sufficient cause; beyond that, neither the Appellate Authority nor the High Court can extend time. However, relying on Notification No. 53/2023–Central Tax dated 02.11.2023, the Court permitted restoration of the appeal subject to strict compliance with the special conditions laid down in the notification, and within the notified cut-off date of 31.01.2024.

Simplified Explanation of the Judgment

The petitioner’s statutory appeal under Section 107 BGST against a tax order had been rejected as time-barred. Under the BGST framework, an assessee has three months to file an appeal and, if needed, an additional one month that the Appellate Authority may condone upon showing sufficient cause. Courts have consistently held that once the statute fixes an outer limit for condonation (here, one month beyond the initial three), neither appellate authorities nor writ courts can condone any delay beyond that ceiling. The first appellate authority therefore dismissed the petitioner’s appeal as beyond even the condonable period.

While the writ was pending, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 53/2023–Central Tax dated 02.11.2023 creating a special window to file/regularize appeals against orders passed by the Proper Officer on or before 31.03.2023 under Sections 73 or 74. The notification allowed such appeals to be filed (or treated as properly filed if already pending) up to 31.01.2024, provided the appellant fulfilled specific payment conditions. In other words, this notification temporarily expanded the appeal mechanism beyond Section 107(4)’s usual condonable period, but only if the assessee complied with the special procedure.

The High Court extracted and emphasized paragraphs 2 to 6 of the notification. The key points are:

• Last date: The appeal in FORM GST APL-01 must be filed on or before 31.01.2024. Appeals already filed and pending would be deemed compliant with the notification if they satisfy the payment conditions.
• Pre-deposit/payment conditions:
  (a) The appellant must pay in full the admitted amount of tax, interest, fine, fee, and penalty arising from the impugned order; and
  (b) The appellant must also pay 12.5% of the remaining disputed tax, subject to a cap of ₹25 crores, and at least 20% of that 12.5% must be paid from the Electronic Cash Ledger.
• No refund: No refund would be granted, before disposal of the appeal, for any excess paid earlier beyond the paragraph-3 amounts.
• No “tax-less” demands: Appeals under this window are not admissible for demands not involving tax.
• Rules apply: Chapter XIII of the CGST Rules (appeals) applies mutatis mutandis.

Applying this framework to the case at hand, the Court observed that the petitioner’s appeal had been dismissed on limitation; but given the supervening special window, it would be just and proper to restore the appeal, provided the petitioner satisfied the notification’s payment conditions within the time limit. The Court clarified that at the time of filing an appeal under Section 107, 10% of the disputed tax is ordinarily required as pre-deposit; therefore, when computing the “deficient” amount to reach 12.5% as mandated by the notification, the assessee would have to make up the difference and ensure that the cash-ledger payment requirement (at least 20% of 12.5%) is met.

The Court accordingly set aside the appellate order (which had dismissed the appeal on limitation) and permitted restoration of the appeal, conditional on the petitioner fulfilling paragraph-3 payments on or before 31.01.2024. If those conditions are not met within the stipulated period, the appeal would stand rejected. Importantly, the Court also generalized this relief: even in other matters where this Court had earlier rejected writ petitions against dismissal of delayed appeals (beyond Section 107(4)’s condonable period), assessees can still invoke the notification de hors those orders and seek restoration, again subject to strict compliance with the notification. The Court directed the Commissioner of State Taxes, Government of Bihar, to issue instructions to assessment and appellate officers to scrupulously comply with the High Court’s order and to process restorations within the notification framework.

In essence, the High Court did not extend limitation under Article 226 in the abstract. Rather, it recognized a specific statutory/administrative carve-out created by the Union Government that temporarily re-opened the appeal route for older orders (u/s 73 or 74 up to 31.03.2023) and channeled litigants into that route with clear and measurable conditions, especially the enhanced pre-deposit with a cash-ledger component. This ensures that only serious appellants—those willing to deposit a meaningful portion of the disputed tax—benefit from the extraordinary window. The Court’s approach balances two competing considerations: the finality of tax adjudication versus the fair opportunity to pursue appellate remedies where a nationwide policy decision has created a time-bound window for regularization.

Significance or Implication of the Judgment

For taxpayers in Bihar, this judgment confirms that the CBIC’s special appeal window can revive otherwise time-barred appeals (against orders passed up to 31.03.2023 under Sections 73/74), provided the payment conditions and deadline are met. It signals that High Courts will facilitate access to this remedy but will also enforce the conditions strictly—particularly the 12.5% pre-deposit (with a 20% cash-ledger component). For the tax administration, the decision provides operational clarity and a mandate to instruct officers to restore appeals where conditions are satisfied. For the broader GST ecosystem, it promotes merits-based disposal in appropriate cases while deterring frivolous appeals through a tangible upfront payment.

Legal Issue(s) Decided and the Court’s Decision (with reasoning)

• Whether a time-barred GST appeal (beyond Section 107(4)’s condonable period) can be revived?
  Decision: Yes, if the case falls within CBIC Notification No. 53/2023 and the appellant satisfies the notification’s conditions by 31.01.2024; the appeal may be restored and heard on merits. Reason: The notification creates a special procedure that temporarily enlarges the opportunity to file/regularize appeals for specific orders and timelines, with clearly stipulated deposits and modalities.
• Whether the High Court can otherwise condone delay beyond the statutory cap?
  Decision: No. Absent the notification, neither the appellate authority nor the High Court (in writ) can exceed the outer limit set by Section 107(4). The Court relied on the settled position that courts cannot rewrite limitation schemes fixed by statute.
• What compliance is required to invoke the special window?
  Decision: Full payment of admitted dues plus 12.5% of remaining disputed tax (cap ₹25 crores), with at least 20% of that 12.5% paid through the Electronic Cash Ledger; and filing/regularization by 31.01.2024. Non-compliance means the appeal remains/reverts to rejection.

Case Title

Sarika Constructions Pvt. Ltd. Vs. The State of Bihar

Case Number

Civil Writ Jurisdiction Case No. 4940 of 2023.

Coram and Names of Judges

Hon’ble The Chief Justice; Hon’ble Mr. Justice Rajiv Roy. Date of Judgment: 09.11.2023.

Names of Advocates and who they appeared for

• For the petitioner: Mr. Prabhat Ranjan, Advocate.
• For the respondents (State): Mr. P.K. Shahi, Advocate General; Mr. Vikas Kumar, Advocate.

Link to Judgment

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