Facts of the Case

Adonex Pharmaceutical Private Limited approached the Patna High Court challenging the order-in-appeal dated 08.09.2022 passed in Appeal No. ARN-AD100822004755G by the Additional Commissioner of State Taxes (Appeal), Patna West Division, Patna.

The petitioner’s appeal had been dismissed on the ground of delay, and consequential Form GST APL-02 dated 13.09.2022 communicated rejection of the appeal.

The petitioner also challenged the ex parte order-in-original dated 28.08.2021 bearing Ref. No. ZD100821241835S, whereby its GST registration had been cancelled under Section 29 of the GST Act. The petitioner further sought quashing of the show cause notice dated 13.08.2021, pursuant to which its GST registration had been suspended with effect from 13.08.2021.

The petitioner sought a direction to the respondents to revoke the cancellation and reactivate its GST registration with effect from the date of cancellation, i.e., 28.08.2021.

Issues Involved

  1. Whether the order-in-appeal dated 08.09.2022 dismissing the petitioner’s appeal on the ground of delay warranted interference.
  2. Whether the ex parte cancellation of the petitioner’s GST registration under Section 29 of the GST Act could be reconsidered through an application for restoration.
  3. Whether limitation should prevent the competent authority from considering the petitioner’s application for restoration of GST registration on merits.
  4. Whether the petitioner could be permitted to complete the required formalities for restoration of registration as a dealer under the Goods and Services Tax Act, 2017.

Petitioner’s Arguments

The petitioner challenged the appellate order by which its appeal had been dismissed on the ground of delay.

The petitioner also questioned the ex parte cancellation order dated 28.08.2021 and the show cause notice dated 13.08.2021 relating to suspension and cancellation of its GST registration.

During the proceedings, learned counsel for the petitioner stated that the petitioner was ready and willing to complete the formalities required for restoration of its registration as a dealer under the Goods and Services Tax Act, 2017.

The petitioner also undertook to pay all dues and taxes within four weeks from the date of the decision of the competent authority on its application.

Respondent’s Arguments

The State respondents were represented before the Court by learned Government Pleader.

The judgment does not record any detailed separate substantive counter-arguments advanced by the respondents on the merits of the petitioner’s request for restoration. Accordingly, no argument beyond what is expressly reflected in the judicial order should be attributed to the respondents.

Court Order / Findings

The Patna High Court disposed of the writ petition with the following directions and findings:

  1. The petitioner was permitted to file an application before the competent authority for restoration of its registration as a dealer under the Goods and Services Tax Act, 2017.
  2. Upon receipt of such application, the competent authority was directed to pass appropriate orders in accordance with law immediately and, in any event, not later than four weeks thereafter.
  3. The petitioner undertook to pay all dues and taxes within four weeks from the date of such decision.
  4. The Court expressly clarified that the issue of limitation shall not be allowed to come in the way of consideration of such application on merits.
  5. The writ petition was disposed of in the aforesaid terms.
  6. Any pending interlocutory application was also ordered to stand disposed of.

Important Clarification

The most significant clarification in the judgment is that limitation shall not be allowed to come in the way of consideration on merits of the petitioner’s application for restoration of GST registration.

The Court did not directly record an unconditional restoration of GST registration. Instead, it permitted the petitioner to file the requisite application before the competent authority and directed that authority to decide the application in accordance with law within the prescribed period.

Therefore, the legal effect of the order must be understood precisely: the petitioner was granted an opportunity to seek restoration through the competent authority, and the limitation issue was specifically prevented from obstructing consideration of that application on merits.

Sections / Provisions Involved

Section 29 of the GST Act, 2017 — Relating to cancellation or suspension of GST registration.

Goods and Services Tax Act, 2017 — The petitioner expressed willingness to complete the formalities for restoration of registration as a dealer under the applicable GST law.

Form GST APL-02 — The consequential form dated 13.09.2022 communicated rejection of the petitioner’s appeal.

Concerned Case Law / Legal Principle

Adonex Pharmaceutical Private Limited vs State of Bihar

The case concerns cancellation of GST registration under Section 29, dismissal of the statutory appeal on the ground of delay, and the taxpayer’s request for restoration of registration.

The key principle emerging from the order is that where the taxpayer is ready and willing to complete the required restoration formalities and undertakes to pay outstanding dues and taxes, the competent authority may be directed to consider the restoration application in accordance with law, and limitation should not be allowed to obstruct consideration of that application on merits.

The judgment is particularly relevant in disputes involving:

  • Cancellation of GST registration under Section 29;
  • Ex parte GST registration cancellation orders;
  • Rejection of GST appeals on limitation or delay grounds;
  • Restoration or reactivation of GST registration;
  • Consideration of restoration applications on merits;
  • Taxpayer undertaking to discharge outstanding dues and taxes;
  • Judicial directions fixing a time limit for disposal by the competent GST authority.

Link to download the order

https://www.mytaxexpert.co.in/uploads/1783323569_1220compressed.pdf

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