SC’s suo moto extension of limitation period order is applicable even for condonation period

[CA Bimal Jain]

The Hon’ble High Court, New Delhi in the matter of RAILSYS ENGINEERS PRIVATE LIMITED & ANR. VERSUS THE ADDITIONAL COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX (APPEALS-II) & ANR. - 2022 (7) TMI 1230 - DELHI HIGH COURT sets aside order cancelling Goods and Services Tax (“GST”) registration, and held that Supreme Court suo moto extension of limitation period is applicable for filing appeal against cancellation.

Facts:

The present petition has been filed against the Order-in Appeal (“the Impugned OIA”) passed by the Revenue Department (“the Respondent”) wherein a Show Cause Notice (“SCN”) and order was passed in order to cancel the GST registration of the Railsys Engineers Private Limited & Anr (“the Applicant”) mainly on the following grounds:

1. The limitation period stood extended by various orders passed by the Supreme Court in IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION - 2020 (5) TMI 418 - SC ORDER
2. The SCN, ordering to cancel the GST registration, is an unsigned order which directed the appearance of the Petitioner without indicating the venue where the proceedings would be conducted.
3. The order canceling registration did not bear the signature of the concerned authority.
4. Rule 68 of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) required the Respondent to issue a notice to the Petitioners concerning the non-filing of returns for the period in issue, which the Petitioners did not file their return, spans between February, 2019 and November, 2019.

Respondent’s Contention:

The period of non-filing the returns being prior to Covid-19 kicking in, the orders passed by the Supreme Court in IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION - 2020 (5) TMI 418 - SC ORDER will not be applicable in the Petitioners’ case.

Issue:

• Whether the Petitioner is covered by the orders and directions issued by the Supreme Court in Cognizance for Extension of Limitation [N RE : COGNIZANCE FOR EXTENSION OF LIMITATION - 2020 (5) TMI 418 - SC ORDER], to which, reference has been made hereinabove?
• Whether the order, canceling GST registration need to bear the signature of the concerned authority?

Held:

The Hon’ble High Court, New Delhi RAILSYS ENGINEERS PRIVATE LIMITED & ANR. VERSUS THE ADDITIONAL COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX (APPEALS-II) & ANR. - 2022 (7) TMI 1230 - DELHI HIGH COURT has held as under:

• The period of limitation prescribed for filing the appeal under Section 107 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) is three months, which is amenable to extension by the period of one month by the Commissioner on sufficient cause being shown.
• The extension of limitation applied even to the condonable period, and not just to the prescribed period of limitation under Section 107 of the CGST Act. Therefore, clearly, the Impugned OIA is contrary to the directions issued by the Supreme Court, and therefore, deserves to be set aside.
• Stated that, the Respondents should have appended digital signatures on the SCN and the above-mentioned order, as it has grave implications for the assessee.
• Held that, the Impugned OIA is set aside.

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