Facts of the Case

The petitioner, Shri Dinesh Kumar Goyal, Proprietor of M/s Dec International, filed a writ petition challenging the order dated 18 May 2022 passed by the Assistant Commissioner, Shyambazar Division.

By the impugned order, the Assistant Commissioner rejected the petitioner’s application seeking revocation of the cancellation of its GST registration. The cancellation of registration had earlier been passed on 9 November 2020.

Aggrieved by the rejection of the revocation application, the petitioner approached the High Court by invoking its writ jurisdiction.

The principal question before the Court was whether the petitioner could directly maintain a writ petition against the impugned order or whether the petitioner was required to avail the statutory appellate remedy provided under Section 107 of the CGST Act, 2017.

Issues Involved

  1. Whether an order rejecting an application for revocation of cancellation of GST registration is appealable under Section 107 of the CGST Act, 2017.
  2. Whether the authority passing the order in relation to cancellation or revocation of cancellation of registration falls within the scope of an adjudicating authority for the purpose of Section 107 of the CGST Act.
  3. Whether a writ petition should be entertained when an alternative statutory remedy of appeal is available under the CGST Act.
  4. Whether the petitioner could contend that the authority dealing with the revocation application was not an adjudicating authority within the meaning and scope of Section 107 of the CGST Act.

Petitioner’s Arguments

The petitioner challenged the order dated 18 May 2022 rejecting the application for revocation of cancellation of GST registration.

The petitioner attempted to interpret Section 107 of the CGST Act by contending that the “adjudicating authority” referred to in the said provision could not include the authority that had passed the order for cancellation of registration.

In substance, the petitioner sought to dispute the applicability of the statutory appellate mechanism under Section 107 to the impugned order and invoked the writ jurisdiction of the High Court against the rejection of the revocation application.

Respondents’ Arguments

The respondents opposed the writ petition in the context of the statutory remedy available under the CGST Act.

The matter was considered on the basis that Section 107 provides an appellate remedy to any person aggrieved by a decision or order passed under the CGST Act by an adjudicating authority.

The availability of such an alternative statutory remedy was material to the question of whether the High Court should entertain the writ petition.

Court’s Findings / Order

The High Court, upon a plain reading of Section 107 of the CGST Act, 2017, observed that any person aggrieved by any decision or order passed under the Act by an adjudicating authority may file an appeal before the prescribed appellate authority within the applicable period calculated from the date on which the decision or order is communicated to such person.

The Court did not accept the petitioner’s contention that the adjudicating authority referred to in Section 107 could not be the authority that had passed the order for cancellation of registration.

The Court reasoned that the petitioner had submitted the application for revocation of cancellation before the same officer who had passed the cancellation order. Therefore, while considering the revocation application, the designation or character of that officer could not be treated as having changed.

The Court further noted that no other forum had been prescribed under the GST statute for filing an application for revocation of cancellation of registration other than the very same officer who had passed the cancellation order.

Accordingly, considering the statutory provisions and the availability of an alternative remedy by way of statutory appeal, the High Court declined to entertain the writ petition and refused to grant substantive relief in writ jurisdiction.

However, the Court granted liberty to the petitioner to file an appeal against the impugned order within two weeks from the date of the Court’s order, subject to compliance with all statutory formalities.

The Court further directed that if such appeal was filed within the stipulated period, the concerned appellate authority should consider and expeditiously dispose of the appeal on merits and should not raise the issue of limitation.

With these observations and directions, WPA 19992 of 2022 was disposed of.

Important Clarification

The judgment clarifies that an order rejecting an application for revocation of cancellation of GST registration is subject to the statutory appellate mechanism under Section 107 of the CGST Act, 2017.

A person aggrieved by such an order cannot avoid the appellate remedy merely by contending that the officer who considered the revocation application was the same officer who had passed the original cancellation order.

The Court specifically clarified through its reasoning that the application for revocation is required to be made before the same officer who passed the cancellation order, there being no other statutory forum prescribed for such revocation application. The officer’s designation or legal character does not change merely because the same officer subsequently considers the application for revocation of cancellation.

The judgment also reinforces the principle that where an effective statutory appellate remedy is available, the High Court may decline to exercise writ jurisdiction.

At the same time, the Court protected the petitioner by granting a specific period of two weeks to file the statutory appeal and directing the appellate authority not to raise the objection of limitation if the appeal was filed within that Court-granted period.

Section Involved

Section 107 of the CGST Act, 2017 – Appeals to Appellate Authority

Section 107 provides the statutory remedy of appeal to a person aggrieved by a decision or order passed under the CGST Act by an adjudicating authority.

In the present case, the High Court relied upon the availability of the appellate remedy under Section 107 and held that the petitioner should pursue the statutory appeal rather than seek relief directly through a writ petition.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1783504781_2103compressed.pdf

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