Article 226 Power Survives Section 107(4) Cap on GST Appeal Delay: Rajasthan HC in M R Traders v. Union of India

In M/s M R Traders, through its Proprietor Shri Jagdish v. Union of India & Ors. (2026:RJ-JD:485-DB), the Rajasthan High Court held that Section 107 is a self-contained limitation code excluding Section 5 of the Limitation Act (paras 11.2–11.6). A Division Bench of Justice Arun Monga and Justice Yogendra Kumar Purohit nevertheless allowed the writ petition, following Molana Construction on Article 226 (paras 10, 16). The appellate order dated 11.10.2024 was set aside and the appeal against retrospective cancellation of registration remanded for decision on merits (para 16).

Update (18 August 2026): In Shrawan Singh Devda v. Union of India (2026:RJ-JP:37098-DB), a later Division Bench held Molana Construction and the decisions founded on it, including this ruling in M R Traders, to be per incuriam, and declined to condone delay beyond Section 107 under Article 226 as a matter of course (para 27). Read the Article 226 holding below with that later ruling.

Headnote: Section 107(4) Delay Condonation

CGST Act, 2017 – Sections 30, 107(1) and 107(4) – Limitation Act, 1963 – Sections 5 and 29(2) – Appeal against cancellation of GST registration – Delay beyond condonable period – Jurisdiction of Appellate Authority – Article 226 – Fault of counsel/accountant – Articles 14 and 21

Held: (i) Section 107 is a self-contained limitation scheme; the Limitation Act is excluded by necessary implication (paras 11.2, 11.6).

(ii) Section 107(4) is a jurisdictional cap; the Appellate Authority cannot condone delay beyond the further one month (paras 11.3–11.4).

(iii) The High Court's discretion under Article 226 is not curtailed by Section 107; Molana Construction followed (paras 10–11, 11.5).

(iv) Later Division Bench orders refusing relief were fact-specific and lay down no contrary principle (para 9).

(v) A sworn affidavit blaming the counsel/accountant, with family illness, was sufficient cause (paras 14–15).

(vi) Delay condoned under Article 226 and appeal remanded on merits (para 16).

(paras 7–16)

Case Details: M R Traders v. Union of India (2026:RJ-JD:485-DB)

Final Outcome: Writ petition allowed; appellate order dated 11.10.2024 set aside; 160-day delay condoned under Article 226; appeal remanded for adjudication on merits (para 16).

Case: M/s M R Traders, through its Proprietor Shri Jagdish v. Union of India & Ors.

Neutral Citation: 2026:RJ-JD:485-DB

Case No.: D.B. Civil Writ Petition No. 4558/2025

Court: Rajasthan High Court, Jodhpur (Division Bench)

Date of Decision: 7 January 2026

Bench: Justice Arun Monga (author) and Justice Yogendra Kumar Purohit

Relevant Acts & Sections: CGST Act, 2017 – Sections 30, 39(1), 107(1), 107(4) and 108; Rajasthan GST Act, 2017; Limitation Act, 1963 – Sections 5 and 29(2); Constitution of India – Articles 14, 19(1)(g), 21, 226 and 301

Impugned Order: Order-in-Appeal dated 11.10.2024 (uploaded 19.11.2024) of the Additional Commissioner (Appeals), CGST, Jodhpur, dismissing the appeal as time-barred; Order-in-Original dated 09.03.2023 cancelling registration w.e.f. 01.04.2022 (paras 1, 2.4, 2.12)

Counsel: Mr. Parasmal Chopra (through VC), Mr. Aman Rewariya, Ms. Prerna Chopra for Mr. P.M. Chopra, Mr. Dinesh Kumar Joshi and Ms. Shashi Vaishnav for the petitioner; Mr. Lucky Rajpurohit for Mr. Rajat Arora for the respondents.

Source: Rajasthan High Court (official website)

Key Holdings of the Rajasthan High Court

• Fiscal statutes are construed strictly; Section 107 is a rigid, self-contained limitation framework (para 11.2).
• Section 107(4) allows condonation for only one further month, and the cap is "absolute" for the Appellate Authority (paras 11.2–11.3).
• Invoking Section 5 of the Limitation Act beyond that cap would rewrite the provision (para 11.4).
• The Calcutta High Court's contrary view in S.K. Chakraborty & Sons was not followed (paras 11.1, 11.6).
• The High Court's Article 226 power to condone delay is not curtailed by Section 107 (paras 10–11, 11.5).
• Non-restoration of registration where the taxpayer intends to comply may violate Articles 14 and 21 (para 13).
• A sworn affidavit blaming the counsel/accountant cannot be given "short shrift" for lacking the consultant's affidavit (paras 14–15).

Brief Facts of the Case

The petitioner is a proprietorship registered under the CGST and RGST Acts, executing works contracts and trading. From FY 2021-22, it filed quarterly returns, with compliance entrusted to an accountant/local advocate (paras 1, 2.1–2.2).

On 15.01.2023, a show cause notice proposed cancellation for non-filing of returns for six months, and registration was suspended (para 2.3). On 09.03.2023, registration was cancelled with retrospective effect from 01.04.2022 (para 2.4).

The appeal in Form GST APL-01 was filed on 18.12.2023, about 160 days beyond the three months plus one month allowed (paras 2.5–2.6). The petitioner blamed its reliance on the accountant/local advocate, lack of communication and the continuous illness of the proprietor's father (paras 2.7–2.9). No revocation application was filed in time (para 2.10).

On 11.10.2024, uploaded on 19.11.2024, the appeal was dismissed as time-barred (para 2.12). The writ petition sought to quash both orders and restore registration (paras 1, 2.13).

Issues Before the High Court

The Court framed the principal question (para 7):

1. Whether the High Court, under Article 226, is precluded from granting relief merely because the Section 107 limitation has expired.
2. Whether Molana Construction correctly states the law, compared with later Division Bench decisions relied on by the respondents.
3. Whether the Appellate Authority itself can condone delay beyond Section 107(4) under the Limitation Act (paras 11.1–11.6).

Court's Findings and Reasoning

Revenue's case (paras 3–3.2, 6): The respondents argued that the SCN went unanswered and the revocation and appeal remedies were not used in time (para 3). The explanation was an afterthought, as the petitioner knew of the cancellation on 01.04.2023 (para 3.1). They relied on D.B. CWP No. 7901/2025 (22.04.2025) and No. 20843/2024 (19.08.2025), which refused similar relief (paras 3.2, 6).

Petitioner's case (para 5): Delay must be judged by cause, not duration, and a litigant should not suffer for counsel's mistake (paras 5.1–5.2). The High Court can condone delay under Article 226, and even the Appellate Authority could under the Limitation Act (paras 5.3–5.4). It invoked Articles 19(1)(g), 21 and 301 and relied on Molana Construction (paras 5.5–5.6).

Molana Construction followed (paras 8–10): Molana Construction treats a statutory appeal as a valuable right (para 8). The later orders turned on a complete absence of explanation and declared no law limiting Article 226 (para 9). Molana Construction was therefore not diluted and was adopted (para 10).

Other High Courts (para 11): The Punjab and Haryana, Calcutta and Madras High Courts hold that Section 107 binds the Appellate Authority but does not curtail Article 226 (para 11).

Appellate Authority cannot use the Limitation Act (paras 11.1–11.4): The Court declined to follow S.K. Chakraborty & Sons, which applied Section 5 through Section 29(2) (para 11.1). Open-ended condonation would render the one-month ceiling "otiose" (para 11.2). The Appellate Authority, a creature of statute, cannot enlarge its own jurisdiction (paras 11.3–11.4).

Jurisdictional competence, not sympathy (paras 11.5–11.6): Constitutional courts may condone delay to prevent denial of remedy, but that elasticity cannot be transposed to the Appellate Authority (para 11.5). The Limitation Act is excluded by necessary implication (para 11.6).

Facilitative object of GST (paras 12–13): The CGST Act also aims at business continuity, as Sections 30 and 107 show (para 12). A missed deadline should not permanently debar a taxpayer willing to pay taxes, interest and penalties (para 13).

Application to facts (paras 14–15): The sworn affidavit blamed the counsel/consultant accountant and cited lack of advice (paras 14–15). The absence of the consultant's affidavit, after a change of counsel, was beyond the petitioner's control (para 15).

Final Outcome and Directions

• The writ petition was allowed and the appellate order dated 11.10.2024 set aside (para 16).
• The 160-day delay was condoned under Article 226 (para 16).
• The appeal was remanded to the Appellate Authority for adjudication on merits (para 16).
• The Order-in-Original dated 09.03.2023 was not quashed and no restoration direction was issued; these remain for the appeal (paras 1, 16).
• Unlike Molana Construction, no deposit condition was imposed. The order is silent on costs (paras 5.6, 16).

Legal Principle Laid Down

Section 107 of the CGST Act is a self-contained limitation code that excludes the Limitation Act by necessary implication. The Appellate Authority cannot condone delay beyond the further one month under Section 107(4). That statutory limit does not curtail the High Court's Article 226 power to condone longer delay on sufficient cause and remand the appeal (paras 11.2–11.6, 14–16).

Precedents Relied Upon

• M/s Molana Construction Company v. Central Goods and Service Tax Department, D.B. CWP No. 12076/2024 (Rajasthan High Court) – Followed – Section 107 binds the authority but not writ proceedings. Discussed at paras 5.6, 8–10.
• D.B. Civil Writ Petition No. 7901/2025 (22.04.2025) and D.B. Civil Writ Petition No. 20843/2024 (19.08.2025) (Rajasthan High Court) – Distinguished – Fact-specific refusals for want of explanation. Discussed at paras 6, 9–10.
• S.K. Chakraborty & Sons, (2024) 123 GSTR 229 : 2023 SCC Online Cal 4759 (Calcutta High Court) – Not followed on Section 5 before the Appellate Authority; noted on Article 226. Discussed at paras 11–11.1.
• Vasudeva Engineering v. Union of India, 2024(11) TMI 259 (Punjab and Haryana High Court) – Referred – Article 226 not curtailed by Section 107. Discussed at para 11.
• Chelliah Meenambigai v. Commissioner of CGST and Central Excise & Ors., 2023 SCC Online MAD 8190 (Madras High Court) – Referred – Same view. Discussed at para 11.
• Assistant Commissioner (CT) LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Limited, (2020) 19 SCC 681 – Referred (within the Molana extract). Discussed at para 5.6.

Important Paragraphs of the Judgment

Verbatim extracts from the judgment. For the full text, refer to the judgment PDF below.

Para 11.4 (jurisdictional cap): "Section 107(4) thus operates as a jurisdictional cap, not a mere procedural guideline. The discretion of the Appellate Authority stands expressly exhausted upon expiry of the additional one month contemplated therein. Any attempt to invoke Section 5 of the Limitation Act to travel beyond this statutorily ordained boundary would amount to rewriting the provision and arrogating to the authority a power which the legislature has consciously withheld."

Para 11.5 (Article 226): "The distinction, therefore, is not one of sympathy or sufficiency of cause, but of jurisdictional competence. While constitutional courts, exercising plenary powers under Article 226 of the Constitution of India, may in appropriate cases condone delay so as to prevent a complete denial of remedy, such constitutional elasticity cannot be transposed into the statutory framework governing the Appellate Authority."

Para 11.6 (Limitation Act excluded): "Thus, we are of the opinion that the statutory scheme under Section 107 admits of no discretion with the appellate authority to grant extension beyond the expressly prescribed period. The application of the Limitation Act stands unequivocally excluded by necessary implication."

Para 13 (livelihood): "Cancellation of GST registration or missed appellate deadlines should not permanently debar a taxpayer from the GST framework, especially where the taxpayer intends to comply by filing returns, paying taxes, interest, and penalties, and rectifying defaults."

Para 16 (directions): "Taking a wholesome view, the writ petition is allowed. Impugned appellate order dated 11.10.2024 is set aside. Delay of 160 in filing of the appeal is condoned in exercise of jurisdiction under Article 226 of the constitution of India. The appeal is remanded to the appellate authority for adjudication on merits in accordance with law."

Practical Impact of the Ruling

• For taxpayers with cancelled registrations: A time-barred appeal is not the end; approach the High Court with a credible, sworn explanation (paras 13–16).
• For appellate authorities: Delay beyond the further one month cannot be condoned; dismissing such appeals is within jurisdiction (paras 11.4, 11.6).
• For litigants: The affidavit is decisive; counsel's default and family illness, sworn on affidavit, sufficed (paras 14–15).
• For the department: The later Division Bench orders do not bar relief where a genuine explanation exists (paras 9–10).
• For practitioners in other States: The ruling differs from Calcutta on the Limitation Act but agrees with P&H, Calcutta and Madras on Article 226 (paras 11–11.1).

FAQs on Section 107(4) Delay Condonation

1. What did the Rajasthan High Court hold in M R Traders v. Union of India?

It held that the Appellate Authority cannot condone delay beyond the further one month under Section 107(4). The High Court, however, can condone longer delay under Article 226; it condoned 160 days and remanded the appeal (paras 11.4, 11.6, 16).

2. Can the GST Appellate Authority use Section 5 of the Limitation Act to condone delay?

No. Section 107 is self-contained and the Limitation Act is excluded by necessary implication. The Court declined to follow the Calcutta High Court's contrary view (paras 11.1–11.6).

3. Can the High Court condone delay in a GST appeal beyond the Section 107 limit?

Yes. Article 226 discretion is not curtailed by Section 107, following Molana Construction. It is exercised in appropriate cases to prevent denial of remedy (paras 10–11, 11.5).

4. Is fault of the accountant or counsel sufficient cause for delay in a GST appeal?

It can be. The sworn affidavit blaming the counsel/consultant accountant, with family illness, was accepted. The absence of the consultant's affidavit did not defeat it (paras 14–15).

5. What relief was granted to M R Traders?

The appellate order dated 11.10.2024 was set aside and the delay condoned under Article 226. The appeal against cancellation of registration was remanded for decision on merits (para 16).

Keywords: Section 107(4) delay condonation, M R Traders v. Union of India, 2026:RJ-JD:485-DB, D.B. Civil Writ Petition No. 4558/2025, Section 107 CGST Act, Section 5 Limitation Act, Article 226, GST registration cancellation, Molana Construction, S.K. Chakraborty & Sons, tax litigation lawyer, Rajasthan High Court, Justice Arun Monga

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• More High Court judgments on GST and indirect tax
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Download Judgment PDF – M R Traders v. Union of India

Judgment PDF: 2026:RJ-JD:485-DB – M/s M R Traders, through its Proprietor Shri Jagdish v. Union of India & Ors. (D.B. Civil Writ Petition No. 4558/2025) – The judgment PDF will be uploaded here shortly.

Source: Rajasthan High Court (official website).

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