2022 (11) TMI 1184 - HC - GST

Cancellation of GST registration of petitioner - delay on the part of the petitioner for non payment of dues, non filing of returns, were condonable or not - Section 107 of the CGST Act - HELD THAT - As rightly contended by the learned counsel for the petitioner, though the 1st respondent Appellate Authority does not have any power to condone the delay in preferring an appeal under Section 107 of the CGST Act, in a given case, it is open for this Court to condone the delay by exercising its powers under Article 226 of the Constitution of India. In the instant case, it is the specific assertion of the petitioner that due to financial constraints and covid-19 pandemic and on account of bonafide reasons, unavoidable circumstances and sufficient cause, it was not possible for him to not only file the GST returns and make payment within the stipulated time, but also could not prefer the appeal within the prescribed period. The explanation offered by the petitioner in not making GST payment and delay in filing returns and preferring an appeal deserves to be accepted and by adopting a justice oriented approach, it is deemed just and appropriate to set aside the impugned orders and the 2 nd respondent is directed to restore the GST registration of the petitioner, subject to payment of all dues by the petitioner. Petition allowed.

Summary

Issues:
1. Delay in filing GST returns and making payments leading to cancellation of GST registration.
2. Appeal before the 1st respondent seeking condonation of delay.
3. Jurisdiction of the 1st respondent to condone delay under Section 107 of the CGST Act.
4. Petitioner's submission citing financial constraints and covid-19 pandemic as reasons for delay.
5. Court's power under Article 226 to condone delay.
6. Merits of the petition and the respondent's argument.
7. Court's decision to set aside impugned orders and restore GST registration subject to payment of dues.

Analysis:
The petitioner sought relief through a writ to quash the impugned order canceling their GST registration due to delayed payments and returns, citing financial constraints and the covid-19 pandemic as reasons. The 1st respondent, the Appellate Authority, dismissed the appeal, stating a lack of jurisdiction to condone the delay beyond the prescribed period under Section 107 of the CGST Act. The petitioner argued that the Court could condone the delay under Article 226 of the Constitution, referencing relevant case law. The respondent contended that the petition lacked merit.

The Court acknowledged the 1st respondent's limitation in condoning the delay but asserted its authority under Article 226 to consider the petitioner's explanation for the delay. Considering the financial constraints, pandemic impact, and bonafide reasons presented by the petitioner, the Court deemed it just to set aside the impugned orders. The Court directed the 2nd respondent to restore the petitioner's GST registration upon payment of all dues.

In the final order, the Court allowed the petition, setting aside the impugned orders from the 1st and 2nd respondents. The 2nd respondent was directed to restore the GST registration promptly, allowing the petitioner to file GST returns upon clearing outstanding dues within one month. Failure to pay within the stipulated time would nullify the benefits granted by the Court's order.