2024 (3) TMI 264 - HC - GST

Cancellation of GST registration of petitioner - appeal barred by limitation or not - appeal was filed after a period of four months - HELD THAT - The mandatory prerequisites for reckoning the start point of period of limitation are these. The authority has to make a finding in regard to the mode of copy of the order and also whether service upon the concerned person is complete. Secondly the authority has to record its satisfaction that the order has been communicated to the assessee/person . The impugned order does not reference the mode of service of the order nor does it record its satisfaction of service in the order. The finding that the order was communicated to the assessee/person is also absent. Learned tribunal was misdirected in law, inasmuch as, it neglected to record its satisfaction of the mandatory prerequisites for triggering the clock of limitation. The impugned order dated 28.09.2022 passed by the respondent No.2/learned appellate authority is liable to be set aside and is set aside - matter is remitted to the learned appellate authority for fresh adjudication in accordance with law - Petition allowed.

Summary

Issues involved:
The cancellation of GST registration, appeal filed by petitioner under Section 107 of the CGST Act, interpretation of phrase "communicated to such person" for limitation period, service of notice under Section 169, mandatory prerequisites for start of limitation period, guidance from Madras High Court on cancellation of registration.

Cancellation of GST registration:
The petitioner's GST registration was initially cancelled by the Assistant Commissioner, Noida Sector-10. The petitioner appealed this decision before the Additional Commissioner, Grade-2 (Appeal)-Ist, State Tax, Noida. The appeal was rejected on grounds of being time-barred, as it was filed after the three-month limitation period specified in Section 107 of the CGST Act.

Interpretation of phrase "communicated to such person" for limitation period:
Section 107 of the CGST Act outlines the limitation period for filing appeals. The phrase "communicated to such person" marks the start point of limitation. Previous judicial interpretations emphasized the necessity of the order being brought to the knowledge of the aggrieved person to safeguard the right of appeal. The failure to record the mode of service or satisfaction of communication to the assessee/person renders the appeal time-barred.

Service of notice under Section 169:
Section 169 of the Act specifies methods for serving notices, decisions, or orders. The provision deems communication to have occurred upon tendering, publishing, or affixing the document as prescribed. The mode of service plays a crucial role in initiating the limitation period, and proof of receipt is essential unless disproved.

Mandatory prerequisites for start of limitation period:
For the limitation period to commence, the authority must ascertain the mode of order copy and confirm complete service to the concerned person. Additionally, the authority must explicitly state its satisfaction that the order was communicated to the assessee/person. Failure to fulfill these prerequisites results in a misdirection of law and neglect of mandatory conditions.

Guidance from Madras High Court on cancellation of registration:
The Madras High Court's guidance in cases of cancellation of dealer registration emphasizes the benefit of restoring registration to facilitate revenue collection. The Court highlighted that reviving registration aligns with the GST regime's goals and ensures legitimate business operations. The impugned order was set aside, and the matter was remitted for fresh adjudication in line with the observations made in the judgment, with a directive to complete the process within two months.