2024 (12) TMI 1077 - HC - GST

Challenge to order in Appeal and consequential summary of the demand - time limitation - appeal preferred by petitioner has been rejected on the ground of being filed after expiry of period of limitation as prescribed under Section 107 of the Central Goods and Services Tax Act, 2017 - HELD THAT - It appears that a show cause notice was issued to the petitioner (Annexure-3) for not filing returns for a continuous period of six months. Thereafter, the petitioner duly filed its reply on 07.04.2022, however, the same was not considered for the reasons mentioned in the order for cancellation of registration (Annexure-4). Thereafter, petitioner, after a lapse of almost 17 months from the date of passing of impugned order of cancellation of registration filed an appeal and the appellate authority rejected the appeal on the ground of limitation. It appears that under Section 107 of CGST Act, 2017, there is a period of limitation of 3 months prescribed, however, the petitioner, as stated hereinabove, filed the appeal not only beyond the period of limitation of few days; rather he filed the application after a delay of almost 17 months and no reasons have been assigned. There are no hesitation in holding that the petitioner Firm is not entitled for any relief on the ground of being lethargic in approach, inasmuch as, on the one hand, the petitioner did not file its return for a continuous period of six months and on the other hand, petitioner-Firm filed appeal before the appellate authority after a delay of almost 17 months which is admittedly beyond the period of three months for filing appeal as prescribed under Section 107 (1) of the CGST Act, 2017. The instant writ application stands dismissed.

Summary

Issues:
1. Quashing of order in Appeal No. 24/CGST/JSR/2023-24 and consequential demand summary.
2. Cancellation of GST registration certificate due to failure to furnish returns.
3. Direction to revoke cancellation of GSTIN Registration.
4. Delay in filing appeal and rejection on the ground of limitation.

Analysis:
The petitioner filed a writ application seeking to quash the order in Appeal No. 24/CGST/JSR/2023-24 and the consequential demand summary, which were issued by the Additional Commissioner (Appeal) and rejected the petitioner's appeal due to exceeding the limitation period under Section 107 of the CGST Act. Additionally, the petitioner aimed to challenge the cancellation of their GST registration certificate on the grounds of not filing returns for six consecutive months. The petitioner also requested a direction to revoke the cancellation of their GSTIN Registration, highlighting the adverse impact on their business due to the cancellation.

The petitioner, a partnership firm engaged in transportation services, faced difficulties in filing returns under the GST Act from April 2022 to September 2022 due to non-payment by service recipients. Despite responding to a show cause notice regarding non-filing of returns, the registration was canceled under Section 29 of the CGST Act. The petitioner's appeal, filed after the prescribed limitation period, was rejected solely based on the delay, without considering the merits of the case.

The petitioner's counsel argued that the delay in filing the appeal was due to business disruptions caused by non-payment issues and the petitioner's inability to actively participate in business activities due to medical reasons. However, the respondent authorities defended the cancellation of the registration and the rejection of the appeal, asserting no irregularities in the orders.

Upon deliberation, the court noted the statutory limitation of three months for filing appeals under Section 107 of the CGST Act. The court emphasized that the petitioner's delay of almost 17 months in filing the appeal could not be condoned, as no valid reasons were provided for the substantial delay. The court held that the petitioner's failure to file returns for six months, coupled with the significant delay in filing the appeal, warranted no relief, as the statutory timelines were not adhered to.

The court highlighted the importance of adhering to statutory timelines for filing appeals, as stipulated under Section 107 of the CGST Act. Given the substantial delay in filing the appeal beyond the prescribed period, the court dismissed the writ application, upholding the decisions regarding the cancellation of the GST registration and the rejection of the appeal based on limitation. No costs were awarded in this matter.