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TMI Blog2025 (2) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE DHARMESH SHARMA For the Petitioner Through: Mr. Rupak Srivastava and Mr. Deepak Kapoor, Advs. Mr. Vibhas Kumar Jha, Mr. Rajat Pandey and Ms. Manju Pandey, Advs., Mr. Vijay Gupta, Mr. Rahul Gupta and Mr. Ajesh Kugan M, Advs., Mr. A.K. Babbar and Mr. B.K. Tripathi, Advs., Mr. Anuj Saini and Mr. M. Subhramaniyam, Advs., Mr. Karan Singh, Mr. Rohit Aggarwal, Mr. Paras Sharma, Mr. Harinder, Advs., Mr. Abhay Chitravanshi, Ms. Aakriti Singh, Ms. Taniya Malhotra and Ms. Grisha Sharma, Advs., Mr. Khursheed Ahmad, M. Kamil, Mr. Sameed Salim and Mr. Pawan Kumar Sharma, Advs. Mr. Sermon Rawat and Mr. Harshit Jain, Advs. For the Respondents Through: Mr. Udit Malik, ASC for GNCTD with Mr. Vishal Chanda and Ms. Rima Rao, Advs., Mr. Rajeev Aggarwal, ASC with Mr. Shubham Goel, Mr. Mayank Kamra and Mr. Ankit Kumar, Advs, for R-1 to 3., Mr. Aakarsh Srivastava, SC and Mr. Anand Pandey, Adv., Mr. Raghuvendra Shukla, SPC with Mr. Anil Devlal, Advs. For UOI., Mr. Anurag Ojha, SSC with Mr. Dipak Raj, Mr. Subham Kumar and Mr. Kuldeep Mishra, Advs. Mr. Rajeev Aggarwal, ASC with Mr. Shubham Goel, Mr. Mayank Kamra and Mr. Ankit Kumar, Advs. Mr. Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it jurisdiction. For the sake of convenience and for proper adjudication, each of the writ petitions will be discussed individually. W.P. (C) 14279/2024 5. In the present writ petition, a SCN, bearing reference No. ZA070322183368F, was issued by respondent No. 2 on 31.03.2022, proposing the cancellation of the petitioner firm's GST registration on the ground of "non-commencement of business within six months from the date of registration," in the case of voluntary registration. The petitioner firm submitted a reply to the notice on 03.10.2022, providing explanations for the alleged discrepancies and furnishing the necessary documentation to demonstrate compliance with the GST provisions. Despite this, respondent No. 2 proceeded to cancel the petitioner firm's GST registration on 27.10.2022, with effect from the original date of registration, i.e., 07.06.2018. 6. Feeling aggrieved by the order cancelling the GST registration, the petitioner filed an appeal before the Appellate Authority under Section 107 of the CGST Act on 12.02.2024. However, by order dated 29.07.2024, the appeal was dismissed in limine, on the ground that the impugned order was of 27.10.2022 and the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in M/s Elasto Rubber Pvt. Ltd v. The Commissioner of SGST Delhi W.P.(C) 9516/2024, wherein this Court quashed the cancellation of GST registration. The petitioner states that they have undertaken to settle any tax liabilities accrued or due for the business year 2020 to the present or any charges payable to the respondents. 12. The petitioner further submits that if the respondents retroactively cancel the GST registration effective 23.04.2019, it would invalidate the GST invoices issued during that period and affect the transactions made under that GST number. Consequently, GST officers have been issuing demand notices to purchasers who received GST tax invoices from the petitioner for transactions between 2019 and 2020. The petitioner argues that this is unlawful and unsustainable in law, asserting that the respondents cannot retroactively cancel the firm's registration from 23.04.2019. W.P.(C) 16861/2024 13. In the present writ petition, the petitioner firm had migrated to the CGST Act, holding GSTIN No. 07AAEFE9144R1ZS. The petitioner states that respondent No. 2 [The Superintendent, Ward 62, Zone 05, Range - 121, 4th Floor, Bhikaji Cama Palace, Delhi.] issued a SCN bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lains that due to the COVID-19 outbreak, the firm's accountant relocated to his hometown with the GST portal login credentials leaving the partners unaware of the cancellation order. On 17.12.2020, the partner submitted another reply with the firm's new address, but they remained unaware of the cancellation order dated 26.11.2020. 17. The petitioner firm places reliance on the judgement of the Apex Court in Commissioner of Central Excise, Bangalore v. Brindavan Beverages 2007 SCC OnLine SC 842, wherein it was held that the SCN serves as the foundation upon which the department must construct its case. If the allegations outlined in the show cause notice are vague, lack specificity, are devoid of necessary details, or are unintelligible, it can be conclusively held that the petitioner was not afforded a proper opportunity to address the allegations contained therein. The purpose of a SCN is to provide the noticee with a fair opportunity to respond to the allegations made against them. In the absence of specific particulars, the SCN fails to fulfill its intended purpose and becomes ineffectual. It is a well-settled principle of law that any person against whom an adverse ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The petitioner further states that the order dated 18.04.2023, cancelling the registration retrospectively to 02.07.2017, also bears the "Signature Not Verified" stamp and is digitally signed by an unauthorized officer, making it unsigned and invalid in law. 22. The petitioner submits that the SCN dated 03.02.2023, reflected the reason for cancellation of the Registration Certificate, which reads as follows: - "Failures to furnish returns for a continuous period of six months" in facts and circumstances is not an erroneous reason when six months period has not exhausted." 23. The petitioner submits that this reason does not suffice as he had applied for the cancellation of the Registration Certificate on 09.03.2022. 24. It is further stated that the order dated 18.04.2023 directed the petitioner to pay "ZERO" (0) amount, contradicting the SCN dated 03.02.2023, which alleged failure to pay tax, interest, or penalty beyond six months from the due date. The cancellation order dated 18.04.2023, based on the SCN dated 03.02.2023, is illegal, arbitrary, and invalid, as the cited reason is incorrect. The SCN was issued before the six-month period had expired, and the petitioner had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the annual return for FY 2017-18, respondent No. 2 issued a SCN bearing reference No. ZD070923023779X dated 22.09.2023, alleging an outstanding demand of Rs. 4,55,93,670/- (including interest upon the amount due and penalty) related to the annual return for FY 2017-18. 29. The petitioner firm responded to the SCN, explaining that the excess tax computed for FY 2017-18 had already been reversed in FY 2018-19. The petitioner firm also informed the Proper Officer that M/s Ridhi Sidhi Polymers remained active until 2022 and filed its tax returns up to February 2022. However, respondent No. 2, the Proper Officer, disregarded the petitioner firm's reply and, in the order dated 12.12.2023, concluded that the petitioner firm had not correctly availed input tax credit on inward supplies due to discrepancies in the reconciliation of turnover in GSTR-9, resulting in a tax demand of Rs. 3,88,352/- (CGST: Rs. 1,94,176/- and SGST: Rs 1,94,176/-) for FY 2017-18. 30. The petitioner firm on being aggrieved by the order dated 12.12.2023 passed by the Proper Officer, preferred to file an appeal before the Adjudicating Authority. However, the appeal could only be filed on 12.06.2024 before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjustified. b) The cancellation order dated 12.03.2021, passed by the Proper Officer, should be set aside due to violations of Rules 20, 21A, and 23 (3) of the CGST Rules, 2017. According to Rule 20, the petitioner filed an application for cancellation of registration within 30 days of the event warranting cancellation, due to financial hardship. Additionally, Rule 21A states that upon filing the application, the registration is deemed suspended from the date of submission. However, in this case, the Proper Officer incorrectly suspended the GST registration from the date of the Show Cause Notice, i.e., 03.03.2021, which is legally flawed. As per Rule 22 (3) of the CGST Rules, 2017, the Proper Officer must issue an order within 30 days of the application for cancellation. The petitioner applied on 05.10.2020 and 15.12.2020, but the order was issued on 12.03.2021, exceeding the prescribed period, making it non-compliant with Rule 22 (3). W.P. (C) 13679/2024 35. In the present writ petition, the petitioner firm registered its business on 13.03.2020, bearing GSTIN No. 07LLDPS5372LIZA. The petitioner firm asserts that it has regularly filed GST returns for the financial years 2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited knowledge of GST return filing, he relies on consultants for advice. It is averred that the petitioner, while filing his GST returns, sought consultation from his advisor but was inadequately guided. The petitioner further submits that on 22.01.2022, he applied for a refund of input tax credit with the respondent for the period from 01.04.2020 to 30.11.2021, a time span affected by the COVID-19 pandemic, during which he was unable to consult with anyone adequately. 39. The petitioner submits that after filing the return, Respondent No. 2 issued a SCN dated 04.04.2022, requiring the petitioner to "show cause as to why the refund claim, to the extent of the specified amount, should not be rejected, or the amount erroneously refunded should not be recovered for the reasons stated therein." In response, the petitioner filed a reply on 09.04.2022, attaching all necessary documents as advised by his consultant. It is claimed that the petitioner did not receive any subsequent communication regarding the acceptance or rejection of the refund application and it was only after a significant period that the petitioner, upon inquiring with his consultant, was informed-after checking th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, North, Delhi, Delhi, 110039" until 19.12.2022. Subsequently, the petitioner shifted the business premises to a new address on 20.12.2022, as per the rent agreement e-stamp certificate number IN-DL34164385356664U, and requested an online amendment on 13.06.2023 via ARN AA0706230379524. Consequently, the petitioner was found non-existent at the old business premises. 44. Respondent No. 3 issued a SCN to the petitioner on 22.06.2023, citing the reason as "Section 29 (2) (e) - registration obtained by means of fraud, wilfull misstatement, or suppression of facts." Subsequently, on 06.07.2023, Respondent No. 3 passed an order for the cancellation of the Registration Certificate with a "0" demand. However, the revenue, acting illegally and arbitrarily, canceled the petitioner's GST registration with retrospective effect from 20.12.2019. 45. Aggrieved by the original order dated 06.07.2023 (P-3), the petitioner filed an appeal under Section 107 of the CGST Act before the Appellate Authority on 21.03.2024, accompanied by an application for condonation of delay in filing the appeal beyond the prescribed three-month period. The appeal was filed following the rejection of the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 07AFBPJ6962Q1ZT, was engaged in the business of trading goods, including iron, steel, and scrap items, to various clients. The petitioner had duly filed GST returns for the period from 2017 to August 2021. However, during the COVID-19 pandemic, the petitioner's business suffered significant losses due to the economic downturn. 51. Additionally, it is claimed that several family members of the petitioner became critically ill and passed away during this period, leaving the petitioner emotionally distressed. As a result, the petitioner inadvertently failed to respond to the SCN dated 09.08.2021 and did not take cognizance of the subsequent cancellation of the GST registration through an order dated 19.08.2021. 52. Upon learning in September 2021 that the GST registration had been cancelled by the Superintendent, the petitioner directed his accountant to visit the GST office to initiate the restoration process. However, the Superintendent informed them that the time to file a reply had lapsed and advised them to file an appeal before the appellate authority for the restoration of the GST registration. 53. The petitioner submits that aggrieved by the cancellation of the GST regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the petitioner had an alternative and efficacious remedy available under the law by filing an application for revocation of the cancelled registration, which, it appears, was not exercised in this case. Reliance is placed on an order passed by the Apex Court in Singh Enterprises v. Commissioner of Central Excise (2008) 3 SCC 70; Garg Enterprises v. State of U.P. 2024 SCC OnLine All 2583; and Asst. Commr. (CT), LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Ltd. (2020) 19 SCC 681. ANALYSIS AND DECISION 58. Upon hearing learned counsels for parties and perusing the record, as well as the case law cited at the Bar, we find at the outset that the present writ petitions seeking an extension of the limitation period for filing an appeal under Section 107 of the CGST Act cannot be sustained in law. The reasons are not far to seek. Section 107 of the CGST Act provides as under: "Section 107. Appeals to Appellate Authority.- (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e balance amount shall be deemed to be stayed. (8) The Appellate Authority shall give an opportunity to the appellant of being heard. (9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable. (11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order: Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nth. 60. It is well settled that once a statute prescribes a specific period of limitation, the Appellate Authority does not inherently hold any power to condone the delay in filing the appeal by invoking the provisions of Section 53 or 294 of the Limitation Act, 1963. Reference in this regard can be had to decision in the cited case of Singh Enterprises (supra) wherein it was observed as under: "8. The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of statute are not vested with jurisdiction to condone the delay beyond the permissible period provided under the statute. The period up to which the prayer for condonation can be accepted is statutorily provided. It was submitted that the logic of Section 5 of the Limitation Act, 1963 (in short "the Limitation Act") can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Tribunal. The said provision neither extended the period of limitation for filing an application to the High Court beyond the prescribed period nor did it permit the condonation of the delay. In this context, it was held as follows: "19. The said decision in Popular Construction Co. case [(2001) 8 SCC 470] arose under the Arbitration and Conciliation Act, 1996. The question which arose for consideration in that case was whether provisions of Section 5 of the Limitation Act, 1963 are applicable to an application challenging an award under Section 34 of the Arbitration and Conciliation Act, 1996. In that case, award was filed by the appellant Union of India in the Bombay High Court on 29-3-1999. The appellant filed an application challenging the award on 19-4-1999 under Section 30 read with Section 16 of the Arbitration Act, 1940. Subsequently, the application was amended by inserting the words "Arbitration and Conciliation Act, 1996" in place of "Arbitration Act, 1940". The application was dismissed by the learned Single Judge on 26-10-1999 on the ground that it was barred by limitation under Section 34 of the 1996 Act. The Division Bench rejected the appeal and upheld t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the delay in filing the appeal. However, at the final hearing of the appeal, an objection regarding appeal being barred by limitation was allowed to be raised being a jurisdictional issue and while dealing with the said objection, the Court referred to the decisions in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur & Ors. [(2008) 3 SCC 70 = 2008 (221) E.L.T. 163 (S.C.)], Commissioner of Customs and Central Excise v. Hongo India Private Limited & Anr. [(2009) 5 SCC 791 = 2009 (236) E.L.T. 417 (S.C.)], Chhattisgarh State Electricity Board v. Central Electricity Regulatory Commission & Ors. [(2010) 5 SCC 23] and Suryachakra Power Corporation Limited v. Electricity Department represented by its Superintending Engineer, Port Blair & Ors. [(2016) 16 SCC 152] and concluded that Section 5 of the Limitation Act, 1963 cannot be invoked by the Court for maintaining an appeal beyond maximum prescribed period in Section 125 of the Electricity Act. x x x x x 19. Arguendo, reverting to the factual matrix of the present case, it is noticed that the respondent had asserted that it was not aware about the passing of assessment order dated 21-6-2017 although it is admitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by it. That reason can have no bearing on the justification for non-filing of the appeal within the statutory period. Notably, the respondent had relied on the affidavit of the Site Director and no affidavit of the concerned employee (P. Sriram Murthy, Deputy Manager-Finance) or at least the other employee [Siddhant Belgaonker, Senior Manager (Finance)], who was associated with the erring employee during the relevant period, has been filed in support of the stand taken in the application for condonation of delay. Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non-compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24-9-2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all. xxxxx 21. Taking any view of the matter, therefore, the High Court ought not to have entertained the subject writ petition filed by the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extension in specific instances, did not intend for the Limitation Act to apply to proceedings under the CGST Act. If such an intention existed, there would have been no need to confer special powers on the High Court to entertain appeals beyond the prescribed period, subject to sufficient cause being shown. This distinction is crucial because, unlike other legislations where Section 5 of the Limitation Act applies automatically via Section 29 (2), the CGST Act prescribes a rigid timeframe. Further, the absence of the phrase "but not thereafter" in Section 107 (4) does not dilute its mandatory nature. 67. Likewise, the Allahabad High Court in Yadav Steels v. Commissioner 2024 SCC OnLine All 2396 dealt with a matter wherein the appeal was filed 66 days after the expiry of the additional one-month period, making it ineligible for condonation, decision of the Appellate Authority that refused to entertain it in view of section 107 (4) was upheld. Emphasizing the significance of the statutory limitations in tax laws, particularly in the context of the CGST Act, it was also pointed out that limitation provisions are crucial in ensuring the timely resolution of disputes, promoting legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct would cease to apply. 70. In view of the forgoing discussion, as it is evident that each of the appeals was filed beyond the prescribed period of limitation provided by Sections 107 (1) and 107 (4) of the CGST Act, the aforesaid writ petitions lack merit and are accordingly dismissed. 71. The pending applications also stand disposed of. ------------------- Notes: 1. Section 107. Appeals to Appellate Authority (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. 2. (4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month. 3. 5. Extension of prescribed period in certain cases.-Any appeal or any application, other than an application under any of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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