Landmark Judgment Sets Aside Rejection of Appeal Filed Beyond 120 Days, Emphasizes Statutory Interpretation of 'Months' Under Section 107 of CGST Act, 2017
In a significant judgment delivered on November 3, 2026, the Bombay High Court (Division Bench comprising Justices M. S. Karnik and Sandesh D. Patil) clarified the computation of limitation period for filing appeals under the Central Goods and Services Tax Act, 2017 (CGST Act). The Court held that the limitation period prescribed under Section 107 of the CGST Act must be calculated in terms of calendar months rather than converting months into a fixed number of days, such as 120 days.
The case arose when United India Insurance Company Ltd. (Petitioner) challenged the dismissal of its appeal by the Appellate Authority. The impugned order, dated May 7, 2026, had rejected the appeal on the ground that it was filed beyond the prescribed limitation period. The Appellate Authority treated the limitation period of "three months" plus a condonable period of "one month" under Section 107(1) and 107(4) of the CGST Act as a total of 120 days. Since the appeal was filed on the 122nd day from communication of the order, it was deemed time-barred.
The petitioner filed a writ petition under Article 226 of the Constitution of India before the High Court contending that the limitation period under Section 107 should be computed according to calendar months as expressly provided by the statute, and not by mechanically converting months into days. The petitioner argued that such mechanical computation leads to unjust rejection of appeals.
The Court, after hearing learned counsel for both sides, observed that the statutory language clearly uses the term "months" which means calendar months and not an inflexible number of days. Section 107(1) prescribes a limitation period of three months from the date the order is communicated, and Section 107(4) allows condonation of delay up to one month. The use of the word "months" in the statute mandates computation by calendar months. The Court emphasized the distinction between "days" and "months" in statutory interpretation and held that converting months into days for limitation purposes is erroneous.
The Court quashed the impugned order that treated "months" as "days" and set aside the rejection of the petitioner's appeal on limitation grounds. It directed the Appellate Authority to hear the appeal on merits in accordance with law.
This judgment clarifies the correct legal position on limitation computation under the CGST Act and protects the right of taxpayers to have their appeals adjudicated on merits if filed within the calendar month period prescribed by the statute.
Bottom Line:
Under the Central Goods and Services Tax Act, 2017 (CGST Act), the limitation period for filing an appeal under Section 107 must be computed in terms of calendar months, not as a fixed aggregate of 120 days.
Statutory provision(s): Central Goods and Services Tax Act, 2017 Section 107
United India Insurance Company Ltd. v. Union of India, (Bombay)(DB) : Law Finder Doc Id # 3017459
