2023 (1) TMI 1375 - HC - GST

Cancellation of GST registration of petitioner - time limitation - rejection of the appeal on the ground of delay in submission of appeal - non-speaking order - HELD THAT - This Court finds that the assessee has taken grounds in his memo of appeal wherein he has explained the delay in approaching the appellate forum which the first appellate authority has not considered and has passed an order based on a format in a routine manner. This Court finds that such type of practice cannot be accepted from an appellate authority as the cancellation of registration of GST affects the business of an assessee and by cancellation of registration in a routine manner would only lead to evasion of more taxes by a businessman - The authorities should be more sensitive while dealing with the cancellation of registration of GST and if it is found that a plausible explanation has been afforded by the assessee, the authorities should pass an order so as to see that more and more business thrives in a legal manner and no tax is evaded by any person carrying of any business. This Court finds that the appellate order dated 19.10.2022 passed by the first appellate authority is unsustainable in the eyes of law as it is a non-speaking order and same is hereby set aside. The matter is remitted to the first appellate authority to consider and decide the appeal afresh in accordance with law. Writ petition stands partly allowed by way of remand.

Summary

Issues Involved:
Cancellation of GST registration u/s 29 of the GST Act, 2017; Rejection of appeal by appellate authority u/r 46 of the GST Rules, 2017 on the ground of delay.

Cancellation of GST Registration:
The writ petition challenged the cancellation of GST registration of the petitioner by the respondent no. 3, which was upheld by the appellate authority due to delay in submission of appeal. The counsel for the petitioner argued that the appellate authority did not consider the grounds raised in the appeal and dismissed it solely based on the delay issue. The Standing Counsel for the State explained that the cancellation was a result of non-filing of returns by the assessee and failure to respond to the show cause notice. The High Court observed that the appellate authority's decision was based on a format and did not take into account the reasons provided by the assessee for the delay in approaching the appellate forum. The Court emphasized the importance of considering explanations from the assessee in such matters to prevent evasion of taxes and ensure fair treatment under the law.

Rejection of Appeal:
The appellate order dated 19.10.2022 was deemed unsustainable by the High Court as it was considered a non-speaking order, lacking a detailed rationale. The Court set aside the order and directed the matter to be reconsidered by the first appellate authority. The Court emphasized the need for a fair and thorough review of the appeal, highlighting that the authorities should be sensitive in handling matters related to GST registration cancellation to promote legitimate business activities and prevent tax evasion. The first appellate authority was instructed to reevaluate the appeal within one month of receiving a certified copy of the Court's order, ensuring the assessee is given a proper opportunity to present their case.

In conclusion, the High Court partially allowed the writ petition, setting aside the unsustainable appellate order and remitting the matter for a fresh consideration in accordance with the law.