Facts of the Case

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

Under the provisions governing GST appeals, an appeal against the cancellation order could be filed within the prescribed limitation period. Although the petitioner filed the electronic appeal on 17.06.2022, the required hard copy of the appeal could not be submitted within the statutory time limit. Consequently, the appellate authority dismissed the appeal on 21.09.2022 solely on the ground that it was barred by limitation.

Aggrieved by the dismissal of the appeal without consideration on merits, the petitioner approached the Rajasthan High Court by filing a writ petition.

 

Issues Involved

  1. Whether the appellate authority was justified in dismissing the appeal solely on the ground of limitation without examining the merits of the case.
  2. Whether a taxpayer whose GST registration has been cancelled should be granted an opportunity to pursue the statutory appeal despite procedural delay.
  3. Whether denial of such opportunity adversely affects the taxpayer's fundamental right to carry on business and livelihood protected under Article 21 of the Constitution of India.

 

Petitioner's Arguments

The petitioner contended that although the e-appeal had been filed, the appeal was dismissed merely because the hard copy was not submitted within the prescribed period. Such dismissal deprived the petitioner of any effective statutory remedy.

The petitioner relied upon the following judicial precedents:

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

It was argued that the petitioner had been rendered remediless due to a purely technical procedural lapse. The cancellation of GST registration prevented the petitioner from carrying on business, resulting in loss of livelihood and infringing the constitutional protection guaranteed under Article 21 of the Constitution of India.

Accordingly, the petitioner requested that one more opportunity be granted to file the appeal in the prescribed format and that the appellate authority be directed to decide the matter on merits in accordance with law.

 

Respondent's Arguments

The respondents opposed the writ petition and defended the order passed by the appellate authority.

However, the Department fairly conceded that the legal principles laid down in the various High Court judgments relied upon by the petitioner were applicable to the facts of the present case and covered the controversy involved.

 

Court Order / Findings

The Rajasthan High Court observed that cancellation of GST registration effectively prevents a taxpayer from continuing business activities. Such deprivation directly affects the individual's livelihood and consequently implicates the protection available under Article 21 of the Constitution of India.

The Court noted that the controversy was already covered by several High Court decisions which had adopted a liberal approach in similar circumstances involving delayed appeals against GST registration cancellation.

Accordingly, the Court:

  • Set aside the appellate order dated 21.09.2022.
  • Granted liberty to the petitioner to file a fresh appeal before the competent authority within ten days.
  • Directed the appellate authority to decide the appeal on its merits in accordance with law.
  • Specifically directed that the appeal should be considered without rejecting it on the ground of limitation.

The writ petition was accordingly disposed of with the above directions.

 

Important Clarification

  • Cancellation of GST registration should not automatically deprive a taxpayer of the opportunity to pursue statutory remedies where procedural lapses are technical in nature.
  • Courts may exercise writ jurisdiction to protect genuine taxpayers from undue hardship arising from rigid application of limitation provisions.
  • The right to conduct business and earn livelihood has been recognized as an important consideration while deciding cases relating to GST registration cancellation.
  • Procedural requirements should not defeat substantive justice where sufficient grounds exist for granting relief.
  • The judgment reinforces the liberal judicial approach adopted by several High Courts in matters involving delayed appeals against GST registration cancellation.

 

Sections Involved

  • Section 107 of the Central Goods and Services Tax Act, 2017 – Appeals to Appellate Authority.
  • Article 21 of the Constitution of India – Protection of life and personal liberty, including the right to livelihood.
  • Article 226 of the Constitution of India – Writ jurisdiction of the High Courts.

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1784616424_1612compressed.pdf

 

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