2022 (12) TMI 410 - HC - GST

Cancellation of registration of petitioner - appeal rejected on the ground that the counsel for the petitioner on three dates has not appeared and pressed the appeal and in view of Section 107(9) of the Act of 2017 only three adjournments can be granted and thereafter the First Appellate Authority proceeded to pass an ex parte order rejecting the application - HELD THAT - This Court finds that by ex parte order the first appeal filed by the petitioner has been dismissed as he has failed to appear before the authority on 6.4.2021, 24.9.2021 and 2.11.2021. Taking a lenient view, this Court directs the Appellate Authority to reconsider the appeal of the petitioner on merits after hearing the counsel for the petitioner and decide the same within a period of one month from the date of production of certified copy of this order. This Court further directs that the petitioner's counsel shall remain present on the date fixed by the First Appellate Authority and shall argue the matter on merits. Petition disposed off.

Summary

Issues:
1. Cancellation of registration under the Goods and Service Tax Act, 2017.
2. Rejection of application for revocation of cancellation of registration.
3. Dismissal of first appeal due to non-appearance of counsel.
4. Interpretation of Section 107(9) of the Act of 2017.
5. Judicial review of the appellate authority's decision.

Analysis:

1. The petitioner, a registered entity under the Goods and Service Tax Act, 2017, received a show cause notice for cancellation of registration on 27th November, 2020. Subsequently, the registration was canceled by the Taxing Authority on 7.12.2020 as the petitioner did not respond to the notice. An application for revocation of cancellation was made by the petitioner but was rejected on 26.4.2021. The First Appellate Authority dismissed the appeal on 17.11.2021 due to the petitioner's counsel not appearing on multiple dates, leading to an ex parte order.

2. The petitioner cited a judgment from a coordinate Bench in a similar case to argue that the notice was issued under Section 29(2)(a) of the Act, while the cancellation was based on alleged bogus transactions under Section 74. The Standing Counsel, however, contended that the appellant did not raise any grounds before the First Appellate Authority, necessitating the authority to proceed ex parte.

3. The High Court observed that the first appeal was dismissed ex parte due to the petitioner's failure to appear before the authority on specific dates. In a lenient view, the Court directed the Appellate Authority to reconsider the appeal on its merits after hearing the petitioner's counsel and mandated a decision within one month from the date of the Court's order. The petitioner's counsel was instructed to be present and argue the case on merits during the reconsideration.

4. Notably, the Court's decision to allow the appeal to be reconsidered was based on a more lenient interpretation of Section 107(9) of the Act of 2017, which limits the number of adjournments that can be granted during proceedings. The Court's directive aimed to ensure a fair hearing for the petitioner and a proper consideration of the appeal's merits by the Appellate Authority.

5. Ultimately, the High Court disposed of the writ petition in light of the directions given for the reconsideration of the appeal, emphasizing the importance of due process and the right to be heard in matters of cancellation of registration under the Goods and Service Tax Act, 2017. The judgment highlighted the significance of legal representation and the need for a thorough review of the case on its merits during appellate proceedings.