2023 (3) TMI 160 - HC - GST

Cancellation of GST registration of petitioner - non-filing of GST returns for a continuous period of six months - non-constitution of GST Tribunal - time limitation for filing appeal - HELD THAT - This is an order passed by the first appellate authority under Section 107(1) of the CGST Act. As per subsection (1) of Section 107 of the CGST Act, limitation for filing appeal is three months from the date of communication of the order appealed against. Under sub-section (4) of Section 107 of the CGST Act, the appellate authority may allow the appeal to be presented within a further period of one month, provided sufficient cause is shown by the appellant - Though the lower appellate authority may be right in holding that while it may allow filing of an appeal beyond the limitation of three months for a further period of one month, therefore, by extension of limitation beyond the extended period of one month delay beyond the extended period of one month cannot be condoned, such a stand taken by respondent No.1 may adversely affect the petitioner. This is more so because respondent No.2 had suo motu cancelled the GST registration of the petitioner on the ground of non-filing of returns and as GST Tribunal has not been constituted under Section 109 of the CGST Act, petitioner would be left without any remedy. Matter remanded back to respondent No.3 for a fresh decision in accordance with law - petition allowed by way of remand.

Summary

Issues:
Challenge to cancellation of Goods and Service Tax (GST) registration and dismissal of appeal.

Analysis:
The petitioner, a partnership firm engaged in rice milling, challenged the cancellation of its GST registration due to non-filing of returns for six months. The High Court noted that the appeal filed by the petitioner was dismissed by respondent No.2 based on a delay in filing beyond the extended period of limitation. The Court highlighted the absence of an appellate Tribunal in Telangana, leading to the filing of the writ petition.

In referencing a previous judgment, the Court emphasized the importance of providing an opportunity for the petitioner to be heard before canceling the GST registration. The Court observed that respondent No.2's cancellation of registration due to non-filing of returns left the petitioner without a remedy, especially in the absence of a GST Tribunal in the state. Consequently, the Court decided to remand the matter back to respondent No.2 for reconsideration and to pass an appropriate order in accordance with the law.

Following the decision in the referenced case, the High Court set aside the orders passed by respondent No.3 and respondent No.2, remanding the matter back to respondent No.3 for a fresh decision. The Court directed respondent No.3 to provide a reasonable opportunity of hearing to the petitioner during the fresh decision-making process, allowing the petitioner to submit the necessary GST returns. It was explicitly stated that the Court did not express any opinion on the merit of the case.

Ultimately, the High Court allowed the writ petition to the extent indicated, without imposing any costs. Any related miscellaneous petitions were deemed closed as a result of the judgment.