Facts of the Case

The petitioner challenged the order dated 18.11.2022 passed by the Appellate Authority in Appeal No. GUN-GST-000-APP-103-22-23, whereby the appeal against cancellation of GST registration was dismissed solely on the ground of limitation.

The GST registration of the petitioner had earlier been cancelled by the Proper Officer through order dated 25.04.2022 with effect from the same date on account of the petitioner's failure to file GST returns for a continuous period of six months, pursuant to the show cause notice dated 13.04.2022.

The petitioner preferred a statutory appeal. However, the appeal was filed with a delay of two months and ten days beyond the prescribed period. Since Section 107 of the CGST Act permits condonation only up to one additional month, the Appellate Authority held that it had no jurisdiction to condone the delay beyond the statutory limit and rejected the appeal without examining the merits.

Aggrieved by the dismissal of the appeal and in view of the non-constitution of the GST Appellate Tribunal under Section 109 of the CGST Act, the petitioner approached the High Court by filing the present writ petition under Article 226 of the Constitution of India.

 

Issues Involved

  1. Whether the High Court can exercise jurisdiction under Article 226 of the Constitution when the statutory appeal has been dismissed as time-barred under Section 107 of the CGST Act.
  2. Whether the absence of the GST Appellate Tribunal constituted under Section 109 of the CGST Act justifies interference by the High Court.
  3. Whether the petitioner should be granted an opportunity for reconsideration of the cancellation of GST registration despite delay in filing the statutory appeal.

 

Petitioner's Arguments

  • The petitioner submitted that there were valid reasons for the non-filing of GST returns.
  • It was argued that the appeal had been rejected only on the technical ground of limitation without examining the merits of the case.
  • Since the GST Appellate Tribunal had not been constituted under Section 109 of the CGST Act, the petitioner was left without any effective statutory remedy.
  • Therefore, the petitioner requested the High Court to exercise its extraordinary jurisdiction under Article 226 and remit the matter to the original authority for fresh consideration.
  • Reliance was placed on an earlier judgment of the High Court in W.P. No. 27071 of 2022, where similar relief had been granted.

 

Respondents' Arguments

  • The respondents contended that the appeal had admittedly been filed beyond the maximum condonable period prescribed under Section 107 of the CGST Act.
  • The Appellate Authority had no statutory power to condone the delay beyond thirty days after the expiry of the prescribed limitation.
  • Therefore, the appellate order was legally valid and did not warrant interference under Article 226.
  • Without prejudice, the respondents submitted that if any relief was to be granted, it should be subject to imposition of costs upon the petitioner.

 

Court Order / Findings

The High Court allowed the writ petition.

The Court observed that:

  • The Appellate Authority had correctly rejected the appeal on limitation in view of the statutory restriction contained in Section 107 of the CGST Act.
  • However, the GST Appellate Tribunal under Section 109 had not yet been constituted, thereby depriving the petitioner of the next statutory forum.
  • A litigant cannot be left remediless merely because the Tribunal contemplated under the statute has not been established.
  • The Court relied upon its earlier decision rendered in W.P. No. 27071 of 2022, wherein identical circumstances existed and similar relief had been granted.
  • Considering that the delay was only two months and ten days, which was not considered inordinate, and in the interest of justice, the matter deserved reconsideration.

Accordingly, the Court:

  • Set aside the effect of the rejection by granting appropriate relief.
  • Remitted the matter to the Primary Authority (1st Respondent).
  • Directed the authority to provide the petitioner with a personal hearing.
  • Directed fresh consideration in accordance with law.
  • Ordered that the exercise be completed within two weeks from receipt of the Court's order.
  • Declined to impose any costs upon the petitioner.

 

Important Clarification

This judgment clarifies that:

  • Although the limitation prescribed under Section 107 of the CGST Act is mandatory and the Appellate Authority cannot condone delay beyond the statutory period, the High Court may exercise its writ jurisdiction under Article 226 where exceptional circumstances exist.
  • Non-constitution of the GST Appellate Tribunal under Section 109 constitutes a valid circumstance for invoking writ jurisdiction so that a litigant is not left without an effective legal remedy.
  • The decision does not enlarge the limitation prescribed under Section 107 but provides equitable relief owing to the absence of the statutory appellate forum.
  • The Court emphasized that justice should prevail where the statutory remedy has become ineffective due to administrative non-constitution of the Tribunal.

 

Sections Involved

  • Article 226, Constitution of India
  • Section 29, Central Goods and Services Tax Act, 2017 (Cancellation of Registration)
  • Section 107, Central Goods and Services Tax Act, 2017 (Appeals to Appellate Authority)
  • Section 109, Central Goods and Services Tax Act, 2017 (GST Appellate Tribunal)

Link to download the order –https://mytaxexpert.co.in/uploads/1782975404_5compressed.pdf 

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