Facts of the Case

The petitioner's GST registration was cancelled with effect from 14.08.2019 on the ground that the petitioner had failed to furnish GST returns for a continuous period of six months preceding the issuance of the show cause notice.

Aggrieved by the cancellation, the petitioner preferred an appeal before the Appellate Authority. However, the appeal was rejected solely on the ground that it had been filed after a delay of two years, seven months and twenty days. The Appellate Authority held that under Section 107 of the GST Act, delay beyond the statutory condonable period of one month could not be condoned.

The petitioner therefore invoked the writ jurisdiction of the High Court seeking restoration of the opportunity to challenge the cancellation order.

Issues Involved

  1. Whether an appeal dismissed as time-barred under Section 107 of the GST Act can still receive judicial relief under Article 226 of the Constitution.
  2. Whether the absence of the GST Appellate Tribunal under Section 109 deprives the petitioner of an effective statutory remedy.
  3. Whether the matter should be remanded to the original authority for reconsideration in the interest of justice.

Petitioner’s Arguments

  • The petitioner submitted that there were valid reasons for the non-filing of GST returns and that the cancellation deserved reconsideration on merits.
  • It was argued that the Appellate Authority rejected the appeal only on the technical ground of limitation without examining the merits of the case.
  • Since the GST Appellate Tribunal contemplated under Section 109 had not yet been constituted, the petitioner had no effective statutory remedy and therefore rightly approached the High Court under Article 226.
  • Reliance was placed upon an earlier Division Bench decision in W.P. No. 27071 of 2022, wherein similar relief had been granted.

Respondent’s Arguments

  • The respondents contended that the appeal had been filed well beyond the limitation prescribed under Section 107 of the GST Act.
  • It was argued that the Appellate Authority possessed no jurisdiction to condone delay beyond the statutory period.
  • Consequently, rejection of the appeal was strictly in accordance with law and the writ petition was not maintainable.

Court Order / Findings

The High Court observed that an identical issue had already been considered by a Division Bench in W.P. No. 27071 of 2022.

The Court held that, since the GST Appellate Tribunal under Section 109 had not yet been constituted, the petitioner could not be left remediless merely because the statutory appeal had been rejected on limitation.

Accordingly, the Court:

  • Allowed the writ petition.
  • Remitted the matter to the original authority (3rd Respondent).
  • Directed the authority to reconsider the petitioner's case.
  • Ordered that a personal hearing be granted.
  • Directed that an appropriate order be passed in accordance with law within two weeks from receipt of the Court's order.

Important Clarification

  • Rejection of a GST appeal on limitation does not necessarily deprive a taxpayer of constitutional remedies where no effective alternate remedy exists.
  • The non-constitution of the GST Appellate Tribunal under Section 109 was treated as a significant factor justifying interference under Article 226.
  • The High Court did not restore the GST registration directly but remanded the matter for fresh consideration after granting an opportunity of personal hearing.
  • The judgment reiterates that extraordinary writ jurisdiction may be exercised to prevent denial of justice where the statutory appellate mechanism is unavailable.

Key Takeaway

This judgment reinforces that where a GST appeal is dismissed as time-barred under Section 107 and the GST Appellate Tribunal has not been constituted under Section 109, the High Court may exercise its writ jurisdiction under Article 226 to ensure that the taxpayer is not left without an effective legal remedy by directing reconsideration of the matter on merits.

Sections / Provisions Involved

  • Section 107 of the Central Goods and Services Tax Act, 2017 – Appeal to Appellate Authority and limitation period.
  • Section 109 of the Central Goods and Services Tax Act, 2017 – Constitution of the GST Appellate Tribunal.
  • Article 226 of the Constitution of India – Writ Jurisdiction of the High Court.
  • Provisions relating to cancellation and restoration of GST Registration.

Link to download the order - https://mytaxexpert.co.in/uploads/1782968466_225compressed.pdf

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