Section 107 Appeal Limitation Runs in Calendar Months, Not a Fixed 120 Days; Appeal Within Three Months Plus One Month Maintainable: Bombay High Court

1. Title of the Case

2. Summary of the Judgment

Facts of the Case: The petitioner, United India Insurance Company Ltd., invoked Article 226 of the Constitution to challenge the order of the Appellate Authority (Respondent No. 3), Order No. JC/APP-II/GST-112/2025-26/United/Rejected dated 7 May 2026, by which its appeal under Section 107 of the CGST Act was rejected as time-barred (para 3). The order appealed against had been communicated to the petitioner on 11 August 2025, and the appeal was filed on 11 December 2025. The Appellate Authority computed the outer limit as 120 days from the date of communication and held the appeal to be delayed by two days (para 5).

Issues for Determination: The question before the Court was whether the limitation of three months under Section 107(1), together with the further condonable period of one month under Section 107(4), is to be computed in calendar months or as a fixed aggregate of 120 days, and consequently whether the appeal filed on 11 December 2025 was within time (paras 4 to 6).

Findings and Observations of the Court: The Court noted that the impugned order had treated the statutory expression ‘months’ in Section 107(1) as ‘days’ and equated four months with 120 days (para 5). It observed that Section 107(4) neither provides a further period of ’30 days’ nor prescribes an aggregate of ‘120 days’, and that both sub-sections express the limitation in ‘months’ (para 6). Accepting the petitioner’s submission, the Court held that there is a clear distinction between a period expressed in days and one expressed in months, and that the period under Sections 107(1) and 107(4) must be computed as calendar months, not by mechanically treating the combined period as an inflexible 120 days (para 7).

Verdict and Basis of the Judgment: Holding that the appeal was within the period of limitation under Section 107, the Court allowed the petition in terms of prayer clause (a), quashed the rejection order dated 7 May 2026 and directed the Appellate Authority to hear the appeal on merits and in accordance with law (paras 8 and 9). The basis was the statutory text, which speaks of months.

Analysis of the Judgment: The ruling corrects a common departmental practice of converting the three-month and one-month periods into 90 and 30 days. Calendar months vary in length, and a mechanical 120-day count can shorten the time Parliament has allowed by one or more days, as it did here. The Court thus ensures that a right of appeal is not defeated by an arithmetic shortcut. Its reasoning applies to every first appeal under the CGST Act and the State GST Acts.

Legal Takeaway: Limitation for a first appeal under Section 107 must be counted in calendar months from the date of communication of the order: three months under sub-section (1) and a further one month under sub-section (4). An appeal filed within that calendar period cannot be rejected merely because it falls beyond 90 or 120 days. Affected taxpayers may seek restoration of such appeals on this basis.

3. Tabular Summary

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