2023 (3) TMI 728 - HC - GST

Maintainability of petition - GST Tribunal has not been constituted under Section 109 of the CGST Act - order passed by the first appellate authority under Section 107(1) of the CGST Act - Cancellation of GST registration of petitioner - non-filing of returns - HELD THAT - This is an order passed by the first appellate authority under Section 107(1) of the CGST Act. As per sub-section (1) of Section 107 of the CGST Act, limitation for filing appeal is three months from the date of communication of the order appealed against. Under sub-section (4) of Section 107 of the CGST Act, the appellate authority may allow the appeal to be presented within a further period of one month, provided sufficient cause is shown by the appellant. Though the lower appellate authority may be right in holding that while it may allow filing of an appeal beyond the limitation of three months for a further period of one month, therefore, by extension of limitation beyond the extended period of one month delay beyond the extended period of one month cannot be condoned, we are of the view that such a stand taken by respondent No.1 may adversely affect the petitioner. This is more so because respondent No.2 had suo motu cancelled the GST registration of the petitioner on the ground of non-filing of returns and as GST Tribunal has not been constituted under Section 109 of the CGST Act, petitioner would be left without any remedy. The issue pertains to cancellation of GST registration of the petitioner. In the facts and circumstances of the case, it would be just and proper if the entire matter is remanded back to respondent No.2 to reconsider the case of the petitioner and thereafter to pass appropriate order in accordance with law. Appeal allowed by way of remand.

Summary

Issues:
Challenge to cancellation of GST registration and dismissal of appeal on grounds of limitation.

Analysis:
The petitioner, a partnership firm engaged in creative art works, had its GST registration cancelled by respondent No.2 due to non-filing of GST returns, despite a show cause notice and unsatisfactory response. An appeal was filed under Section 107 of the CGST Act, 2017, but was dismissed by respondent No.1 on the basis of being beyond the extended period of limitation. The absence of an appellate Tribunal in Telangana led to the filing of the present writ petition.

The main issue in the writ petition was the cancellation of GST registration, which was not a novel question. Referring to a previous decision, the court highlighted the importance of adhering to the statutory timelines for filing appeals. However, the court noted that the stand taken by respondent No.1 might adversely affect the petitioner, especially considering the lack of a GST Tribunal in the state. Consequently, the court decided to remand the matter back to respondent No.2 for a fresh decision after considering the petitioner's grievances.

In line with the above decision, the court set aside the orders passed by respondent No.2 and respondent No.1, remanding the matter back to respondent No.2 for a fresh decision. The court emphasized the need for a reasonable opportunity of hearing to be provided to the petitioner during the fresh decision-making process. It was also clarified that no opinion on the merit of the case was expressed. The writ petition was allowed without costs, and any pending miscellaneous petitions were closed as a result.