Facts of the Case

The petitioner, M/s Swaroop Art, was a registered dealer under the Goods and Services Tax Act. The GST registration of the petitioner was cancelled by the competent authority through an order dated 15.02.2022.

Under Section 107 of the CGST Act, an appeal against cancellation of registration could be filed within the prescribed limitation period of three months, extendable by a further period of thirty days. Although the petitioner filed the appeal electronically on 17.06.2022, the hard copy of the appeal was not submitted within the prescribed limitation period.

Consequently, the appellate authority dismissed the appeal vide order dated 21.09.2022 solely on the ground that it was barred by limitation. Aggrieved by this dismissal, the petitioner approached the Rajasthan High Court by filing the present writ petition.

 

Issues Involved

  1. Whether an appeal against cancellation of GST registration can be rejected solely on the ground of limitation despite the petitioner having initiated the appellate process.
  2. Whether denial of an opportunity to restore GST registration adversely affects the petitioner's fundamental right to carry on business and livelihood under Article 21 of the Constitution.
  3. Whether the appellate authority should be directed to consider the appeal on merits instead of rejecting it on technical grounds.

 

Petitioner's Arguments

The petitioner submitted that although the e-appeal had been filed within the permissible period, the hard copy could not be submitted within the prescribed limitation period due to procedural reasons.

The petitioner relied upon various High Court judgments including:

  • M/s G.G. Agencies Girijeshwar Rice Mill vs State of Karnataka
  • Vinod Kumar vs Commissioner, Uttarakhand State GST
  • TVL. Suguna Cutpiece Centre vs Appellate Deputy Commissioner (ST)
  • M/s Trans India Carco Carriers vs Assistant Commissioner

The petitioner argued that rejection of the appeal merely on technical grounds had left him without any effective remedy. It was further contended that cancellation of GST registration prevented him from carrying on his business, thereby depriving him of his livelihood and violating the protection guaranteed under Article 21 of the Constitution of India.

Accordingly, it was prayed that another opportunity be granted to file the appeal in the prescribed format and that the competent authority be directed to decide the appeal on merits.

 

Respondent's Arguments

The respondents opposed the writ petition and supported the order dismissing the appeal as barred by limitation.

However, during the course of hearing, the respondents fairly acknowledged that the legal principles laid down by various High Courts in the judgments relied upon by the petitioner were applicable to the controversy involved in the present case.

 

Court Order / Findings

The Rajasthan High Court observed that denial of GST registration would prevent the petitioner from continuing his business activities and consequently deprive him of his livelihood.

The Court held that such deprivation directly affects the right to life and livelihood protected under Article 21 of the Constitution of India.

Considering the consistent judicial view taken by several High Courts, the Court found that the matter deserved to be decided on merits instead of being rejected on technical grounds relating to limitation.

Accordingly, the Court:

  • Set aside the appellate order dated 21.09.2022.
  • Granted liberty to the petitioner to file the appeal before the competent authority within ten days.
  • Directed the appellate authority to consider and decide the appeal on all issues in accordance with law.
  • Directed that the appeal shall be decided without rejecting it on the ground of limitation.

The writ petition was accordingly disposed of.

 

Important Clarification

  • Procedural delay alone should not defeat substantive justice where the consequence is cancellation of GST registration and denial of business opportunities.
  • Courts have consistently held that hyper-technical interpretation of limitation provisions should not deprive taxpayers of their statutory remedies where sufficient grounds exist.
  • The right to carry on business and earn livelihood receives constitutional protection under Article 21.
  • Appellate authorities should consider appeals on merits where justice demands relaxation of procedural technicalities in appropriate cases.

Sections Involved

  • Section 29 of the Central Goods and Services Tax Act, 2017 – Cancellation of Registration
  • Section 107 of the Central Goods and Services Tax Act, 2017 – Appeals to Appellate Authority
  • Article 21 of the Constitution of India – Right to Life and Livelihood

 


Link to download the order -

https://www.mytaxexpert.co.in/uploads/1784614485_1610compressed.pdf

 

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