Appellate Authority’s Rejection of Appeal Solely on Original Order’s Date Set Aside; Matters Remanded for Fresh Consideration on Merits
In a significant judgment delivered on August 13, 2026, the Gujarat High Court (Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati) clarified the computation of the limitation period for filing appeals under the Goods and Services Tax (GST) Act, 2017. The judgment arose from a batch of Special Civil Applications filed by Kanan International Pvt. Ltd. and others challenging the rejection of their appeal by the Appellate Authority on the ground of limitation.
The petitioners had initially filed a refund claim which was rejected by the Adjudicating Authority on October 3, 2022. They subsequently filed a rectification application under Section 161 of the GST Act on January 2, 2023 — within the statutory 90-day period. The Adjudicating Authority rejected this rectification application on September 14, 2023. The petitioners then filed an appeal on January 11, 2024, challenging both the original order and the rectification order.
However, the Appellate Authority rejected the appeal on May 31, 2024, solely on the ground of limitation, calculating the period from the original order dated October 3, 2022. The petitioners challenged this rejection before the High Court.
The Court examined the issue and held that where a rectification application is filed within the prescribed statutory period and subsequently decided by the Adjudicating Authority, the limitation period for filing an appeal must be computed from the date of the rectification order and not the original order. The Court relied on its earlier ruling dated January 29, 2026, which emphasized that the Appellate Authority must consider the rectification order’s impact on limitation and cannot mechanically compute limitation from the original order alone.
The Gujarat High Court further observed that while the Appellate Authority does not have the power to condone delay beyond the statutory period of 120 days under Section 107(4) of the GST Act, rejecting an appeal without considering the rectification order when it was filed within the limitation period is impermissible.
Accordingly, the Court quashed and set aside the Appellate Authority’s impugned orders and remanded the matters back to the Appellate Authority for fresh adjudication on merits. The Appellate Authority is directed to decide the appeals within twelve weeks from the date of receipt of the judgment, after affording due opportunity of hearing to the petitioners.
This judgment reaffirms the principle of fair play in tax adjudications under the GST regime and ensures that taxpayers’ rights to appeal are not defeated by a rigid computation of limitation ignoring rectification proceedings.
Bottom Line:
Limitation period for filing an appeal under the GST Act must be computed from the date of the order deciding the rectification application if such application is filed within the statutory period.
Statutory provision(s):
Goods and Services Tax Act, 2017 Section 107(4), Section 161; Constitution of India, Article 226
Kanan International Pvt. Ltd. v. Union of India, (Gujarat)(DB) : Law Finder Doc Id # 2962322
