GST demand and appeal orders set aside as petitioner’s illness justified delay; Court directs fresh adjudication ensuring hearing opportunity under Section 75(4).

Case Title: Sanjit Acharya vs. Assistant Commissioner of Revenue, Directorate of Commercial Tax & State GST 48 & Ors.
Court: Calcutta High Court
Petition No.: WPA 7273 of 2024
Date of Judgment: 25 June 2025
Relevant Sections: Sections 61, 73, 75(4), 107 of the CGST/WBGST Act, 2017
Category of Dispute: Input Tax Credit (ITC) – Appeal Limitation and Opportunity of Hearing

Facts (Para 3–5)

The petitioner, Sanjit Acharya, a physically handicapped individual engaged in the business of gas supply and distribution, challenged the order dated 15 January 2025 rejecting his appeal under Section 107 of the WBGST/CGST Act. The appeal arose from an adjudication order dated 20 November 2023 passed under Section 73 for wrongful availment of Input Tax Credit (ITC) for FY 2017-18.

Due to severe illness and 30% physical disability, the petitioner remained bedridden and could not respond to notices or file an appeal within the statutory time. The appeal, filed belatedly on 11 August 2024, was accompanied by pre-deposit of ₹ 2,24,148/-. The appellate authority, however, dismissed the appeal citing limitation and relied upon precedents such as Hongo India Pvt. Ltd. (SC) while ignoring Calcutta High Court’s Division Bench decision in S.K. Chakraborty v. Union of India (2023 SCC Online CAL 4759), which allowed condonation in extraordinary circumstances.

Questions Before the Court (Para 3, 5, 6)

1. Whether the petitioner’s physical incapacity and medical treatment constituted sufficient cause for condonation of delay in filing appeal under Section 107(4) of the Act.

2. Whether the rejection of appeal without considering such explanation violated principles of natural justice.

3. Whether the proceedings under Section 73 were valid despite absence of response to notices due to medical incapacity.

Observations (Para 7–8)

The Court observed that notices in Forms ASMT-10, DRC-01A, and DRC-01 were indeed issued but not replied to. However, the petitioner’s explanation of prolonged illness and disability merited consideration. The matter involved alleged wrongful utilization of ITC and levy of interest, though it was unclear if such ITC had been actually utilized.

Considering the peculiar facts, Justice Raja Basu Chowdhury held that the petitioner’s medical condition and disability could have reasonably prevented timely compliance. The Court emphasized the need to ensure an opportunity of hearing under Section 75(4) before any tax demand is finalized.

Judgment (Para 9–10)

The Court set aside both:

• The adjudication order dated 20 November 2023, and

• The appellate order dated 15 January 2025.

The matter was remanded to the proper officer to allow the petitioner to file a fresh response to the show-cause notice (DRC-01 dated 16 March 2023) by 16 July 2025. The officer must grant a personal hearing in line with Section 75(4).

The pre-deposit of ₹ 2,24,148/- shall remain credited and adjustable in further proceedings. The attachment order in Form DRC-13 (dated 23 July 2024) was quashed. The writ petition was disposed of accordingly.

Summary of Cases Referred

Between Fine Lines

This judgment underscores that physical incapacity and medical treatment constitute valid grounds for condonation of delay in GST proceedings. Authorities must evaluate such explanations empathetically and cannot mechanically reject appeals on limitation grounds. The ruling reinforces Section 75(4)—mandating a personal hearing before any adverse order—and ensures procedural fairness, particularly for small taxpayers facing health constraints.

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