Case details
Case Title: M/s Mecel Construction vs. Assistant Commissioner, Haldia-I Division, Haldia CGST & Ors.
Court: Calcutta High Court
Petition No.: WPA 27779 of 2024
Judgment Date: 24.12.2024
Category of Dispute: Bank account attachment, Appeal, Limitation and Condonation of Delay
Relevant Sections: Section 107, 108 of the CGST Act, 2017; Section 5 and 29(2) of Limitation Act, 1963
Facts (Paras 1–8)
The petitioner, M/s Mecel Construction, faced a show cause notice during the COVID-19 pandemic on 21st October 2021. Due to prevailing difficulties, no timely reply was submitted, and an adjudication order dated 24th January 2023 was passed. The petitioner contended that the order was never served and only came to know about it when its bank account was frozen. Upon becoming aware, the petitioner filed a representation on 25th April 2024, then preferred an appeal along with an application for condonation of delay and deposited the statutory pre-deposit of ₹6,64,190. Despite this, the authorities maintained the bank account attachment, compelling the petitioner to approach the High Court for relief.
Questions before Court
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Whether the freezing of the petitioner’s bank account was sustainable when a statutory appeal with pre-deposit was already filed.
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Whether the period of limitation under Section 107 of the CGST Act excludes the applicability of Section 5 of the Limitation Act, 1963.
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Whether condonation of delay should be liberally granted considering pandemic-related hardships.
Observations (Paras 9–10)
The Court examined judicial precedents and emphasized that statutory provisions on limitation should be liberally construed in genuine hardship cases. Reliance was placed on S.K. Chakraborty & Sons v. Union of India (2024) 159 taxman.com 259 (Calcutta), wherein it was held that Section 107 of the CGST Act does not expressly or impliedly exclude Section 5 of the Limitation Act. Thus, appellate authorities can extend the limitation period beyond 60 days in appropriate cases. The Court held that attachment of bank accounts during pendency of statutory appeal and pre-deposit was arbitrary and procedurally unfair.
Judgment (Paras 11–14)
The writ petition was allowed. The attachment order was quashed, and the petitioner’s rights under the GST Act were restored. The Appellate Authority was directed to decide the condonation of delay application on merits and, if accepted, to dispose of the appeal on merits within two months. No order as to costs was passed.
Table – Cases referred
| Case | Citation | Verdict |
|---|---|---|
| S.K. Chakraborty & Sons v. Union of India | [2024] 159 taxman.com 259 (Calcutta HC) | Held that Section 107 of CGST Act does not exclude Section 5 of Limitation Act; appellate authority can extend limitation in deserving cases. |
Between fine lines
This ruling clarifies that taxpayers should not suffer coercive actions like bank account attachment once a statutory appeal with pre-deposit is filed. The High Court confirmed that GST appellate timelines can be extended under the Limitation Act in genuine cases, especially those arising from the pandemic. Businesses now have judicial backing that delay condonation should be applied liberally, ensuring access to appeal is not curtailed by rigid timelines.
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