2022 (4) TMI 1288 - Commissioner - GST

Maintainability of appeal - application for Revocation of Cancellation of registrations rejected - non filing of statuary returns for three consecutive tax periods; or for a continuous period of six months - appeal has been filed within the prescribed time-limit or not. Appeals to Appellate Authority - HELD THAT - Appeals have been filed by delay from the normal period prescribed under Section 107(1) of the CGST Act, 2017. Though the delay in filing the appeal is condonable only for a further period of one month provided that the appellant was prevented by sufficient cause from presenting the appeal is shown and the delay of more than one month is not condonable under the provisions of sub section (4) of Section 107 of the Central Goods and Service Tax Act, 2017 - With regard to delay in filing of appeal, the appellants attributed the delay in filing appeal/ furnishing reply to the notice issued to the ongoing pandemic situation on account of the COVID-19 break-out and financial crunches in the business. In these unavoidable circumstances, they could not file appeal within prescribed period, the appeal is not time bar. The CBIC, New Delhi vide Circular No. 157/13/2021-GST dated 20.07.2021 issued under F. No. CBIC-20006/10/2021 has issued clarification regarding extension of limitation under GST Law where it was held that In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021. Thus the delay is condoned. Rejection of application for Revocation of Cancellation of registrations - non-compliance of SCN and/or revocation application is not filed within the specified time - Section 30 of the Act - HELD THAT - The appellants have filed returns upto date of cancellation of registration hence, it is found that the appellants have substantially complied with the said provisions of the CGST Act/Rules, 2017 in the instant cases. Therefore, the registration of appellants may be considered for revocation by the proper officer. The proper officer is ordered to consider the revocation application of the appellant after due verification of payment particulars of tax, late fee, interest, penalty and status of returns in terms of provisions of the CGST Act, 2017 and rules made thereunder - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the appeal has been filed within the prescribed time limit.
2. Whether the appeal filed against the order of cancellation of GST registration is proper.

Detailed Analysis:

Issue 1: Timeliness of Appeal Filing
The appeals were filed under Section 107 of the CGST Act, 2017, which mandates that an appeal must be filed within three months from the date of communication of the decision or order. The appellants attributed the delay to the COVID-19 pandemic and financial difficulties. The Supreme Court, in Suo Motu Writ Petition (Civil) No.3 of 2020, extended the limitation period due to the pandemic. The CBIC Circular No. 157/13/2021-GST further clarified that such extensions apply to appeals under GST law. Given these circumstances, the delay in filing the appeals was condoned, allowing the cases to be decided on their merits.

Issue 2: Propriety of Appeal Against Cancellation of GST Registration
The Proper Officer canceled the appellants' GST registrations due to non-filing of statutory returns for three consecutive tax periods or a continuous period of six months, as per Section 29(2) of the CGST Act, 2017. Applications for revocation of cancellation were also rejected due to non-compliance with SCN or not filing within the specified time under Section 30 of the Act.

The appellants argued that due to the COVID-19 lockdown and financial constraints, they could not file returns or respond to notices timely. They have since filed all pending returns and paid the government dues. The relevant provisions under Rule 23 of the CGST Rules, 2017, and Circular No. 99/18/2019-GST were considered. These provisions stipulate that all due returns must be filed before an application for revocation can be submitted.

Upon review, it was found that the appellants had filed returns up to the date of cancellation of registration, thereby substantially complying with the CGST Act/Rules. Consequently, the appeals were allowed, and the Proper Officer was directed to consider the revocation applications after verifying the payment particulars of tax, late fee, interest, penalty, and status of returns.

Conclusion:
The appeals were disposed of with instructions to the Proper Officer to verify compliance and consider the revocation of the appellants' GST registrations.