Facts of the Case

  • The 1st Respondent (Primary Authority) cancelled the GST registration of the petitioner via an order dated June 14, 2022, effective retrospectively from December 31, 2021.
  • The reason cited for the cancellation was the petitioner's failure to file GST returns for a continuous period of six months prior to the issuance of the Show-Cause Notice (SCN) dated June 3, 2022.
  • Aggrieved by the cancellation, the petitioner filed an appeal before the 2nd Respondent (Appellate Authority).
  • The Appellate Authority, via an order dated December 21, 2022, dismissed the appeal on the sole ground of limitation. The appeal was delayed by 47 days, which exceeded the statutory limit of 30 days beyond the initial 3 months that the Appellate Authority has the power to condone under Section 107.
  • Consequently, the petitioner approached the High Court of Andhra Pradesh via Writ Petition No. 42201 of 2022.

Issues Involved

  • Whether the Appellate Authority was justified in rejecting the GST appeal solely on the technical grounds of a 47-day delay beyond the condonable period under Section 107 of the GST Act.
  • Whether a taxpayer can be left without an effective remedy when their GST registration is cancelled and the GST Appellate Tribunal (GSTAT) has not yet been constituted under Section 109 of the Act.
  • Whether the High Court should exercise its extraordinary jurisdiction under Article 226 to remit the matter back to the primary authority for a decision on merits.

Petitioner’s Arguments

  • The learned counsel for the petitioner, Sri Srinivasa Rao Kudupudi, argued that the petitioner possessed valid, substantive grounds to seek the restoration of their GST registration and had valid reasons for the non-filing of the returns.
  • It was contended that the appeal was rejected purely on a technical statutory limitation ground rather than on its merits.
  • The counsel highlighted that because the GST Appellate Tribunal had not yet been formally constituted under Section 109 of the CGST Act, the petitioner was completely deprived of a statutory alternative forum to contest the appellate order. Therefore, invoking Article 226 of the Constitution was the only available remedy.
  • The petitioner relied upon a Division Bench judgment of the High Court for the State of Telangana in W.P. No. 27071 of 2022, where, under identical circumstances, the court allowed the writ petition and remitted the matter back to the primary authority.

Respondent’s Arguments

  • The learned Government Pleader for Commercial Taxes strongly opposed the writ petition on behalf of the respondents.
  • It was submitted that the petitioner failed to lodge the appeal within the prescribed statutory timeframe and instead preferred it beyond the maximum condonable period permitted to the Appellate Authority under Section 107.
  • The respondent argued that the Appellate Authority acted fully within its statutory bounds, meaning the dismissal order suffered from no legal infirmity, and the writ petition was consequently non-maintainable.

Court Order / Findings

  • The Hon'ble Division Bench of the High Court, comprising Justice U. Durga Prasad Rao and Justice T. Mallikarjuna Rao, perused the records and examined the precedent cited in W.P. No. 27071 of 2022.
  • The Court observed that since the GST Appellate Tribunal under Section 109 of the CGST Act had not been established, taxpayers could not be left entirely remedy-less against orders of the appellate authority.
  • The Court held that the principles established in the Telangana High Court judgment applied entirely to the present case.
  • In the interest of justice, the High Court allowed the writ petition and set aside the technical rejection. The Court remitted the entire matter back to the primary authority (1st Respondent) to re-consider the cancellation of the petitioner's GST registration on its merits.
  • The Court further directed the 1st Respondent to afford the petitioner a fair personal hearing and pass an appropriate speaking order within a strict timeline of two weeks from receiving the order copy.

Important Clarification

  • Absence of GSTAT Enforces Writ Jurisdiction: This judgment reinforces that while statutory authorities are bound by the strict limitation periods set out in Section 107 of the GST Act, the High Court can exercise its extraordinary jurisdiction under Article 226 to provide relief and prevent a taxpayer from being left remedy-less when the GST Appellate Tribunal is not yet functional. Technical delays should not entirely block a taxpayer’s right to be heard on merits when substantial rights, like running a business via GST registration, are impacted.

Section Involved

  • Section 29(2) of the Andhra Pradesh Goods and Services Tax (APGST) Act, 2017 / Central Goods and Services Tax (CGST) Act, 2017: Governs the cancellation of GST registration by the proper officer.
  • Section 107 of the APGST / CGST Act, 2017: Deals with appeals to the Appellate Authority and the prescribed statutory limitation period.
  • Section 109 of the CGST Act, 2017: Pertains to the constitution of the Goods and Services Tax Appellate Tribunal (GSTAT).
  • Article 226 of the Constitution of India: Invocation of extraordinary writ jurisdiction of the High Court.

Link to download the order -https://mytaxexpert.co.in/uploads/1782888205_3.pdf

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