Facts of the Case

The petitioner challenged the order passed by the Joint Commissioner (Appeals), whereby the appeal filed against the cancellation of the petitioner's GST registration was dismissed solely on the ground that it had been filed beyond the prescribed limitation period as well as the condonable period under the GST Act.

The petitioner submitted that severe financial losses suffered before and after the COVID-19 lockdown prevented timely filing of the appeal. It was also contended that the petitioner was unaware of the issuance of the show cause notice, due to which no reply could be submitted and GST returns could not be filed. The petitioner expressed willingness to file all pending returns and deposit the applicable penalty if an opportunity was granted.

Issues Involved

  1. Whether the delay of 119 days in filing the statutory GST appeal deserved to be condoned in the interest of justice.
  2. Whether dismissal of the appeal solely on the ground of limitation was justified under the facts and circumstances of the case.
  3. Whether the petitioner should be granted an opportunity to contest the cancellation of GST registration on merits.

Petitioner's Arguments

  • The delay occurred due to substantial financial hardship arising before and after the COVID-19 lockdown.
  • The petitioner was unaware of the show cause notice issued by the department and therefore could not submit any reply.
  • Since no reply could be filed, GST returns also remained pending.
  • The petitioner was ready to file pending returns and pay the applicable penalty.
  • In the interest of justice, the delay should be condoned and the appeal should be decided on merits.

Respondent's Arguments

The department maintained that:

  • The appeal had been filed beyond the limitation period prescribed under Section 107 of the GST Act.
  • The appeal was also filed beyond the extended limitation period granted pursuant to the orders of the Hon'ble Supreme Court relating to the COVID-19 pandemic.
  • Consequently, the appellate authority rightly dismissed the appeal as time-barred.

Court Order / Findings

The Andhra Pradesh High Court observed that considering the submissions made by the petitioner and in the interest of justice, the matter deserved interference.

The Court held that:

  • The delay of 119 days in filing the appeal should be condoned.
  • The appellate authority's order dated 19.09.2022 dismissing the appeal on limitation was set aside.
  • The matter was remanded to the Joint Commissioner (Appeals) for fresh adjudication.
  • The appellate authority was directed to provide the petitioner with a reasonable opportunity of hearing.
  • A fresh order was directed to be passed strictly in accordance with law within three weeks from the date of receipt of the High Court's order.

Important Clarification

  • High Courts may exercise writ jurisdiction to condone delay in exceptional circumstances where substantial justice demands consideration of the dispute on merits.
  • Genuine hardship caused by the COVID-19 pandemic and surrounding circumstances can be relevant factors while exercising equitable jurisdiction.
  • Dismissal of appeals merely on technical grounds may be interfered with where denial of an opportunity would result in injustice.
  • The judgment reinforces that disputes involving cancellation of GST registration should ordinarily be decided on merits wherever justice so requires.

Sections Involved

  • Section 107 of the Central Goods and Services Tax Act, 2017 – Appeals to Appellate Authority
  • Section 107 of the Andhra Pradesh Goods and Services Tax Act, 2017
  • Provisions relating to Cancellation of GST Registration
  • Limitation and Condonation of Delay under the GST Act

Link to download the order - https://mytaxexpert.co.in/uploads/1782888778_202compressed.pdf

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