Facts of the Case

Penuel Nexus Pvt. Ltd., a direct marketing company, had its GST registration cancelled by the respondents (Ext.P2 order) after it was unable to file returns on time due to disruption caused by the Covid-19 pandemic. The appellant's statutory appeal before the Additional Commissioner Headquarters (Appeals) was rejected on the ground of delay. The appellant then filed a writ petition (WP(C) No.15574 of 2023) challenging Ext.P2, which the learned Single Judge dismissed relying on the Supreme Court's decisions in Singh Enterprises v. Commissioner of Central Excise and CCE & Customs v. Hongo India, holding that the statutory scheme of finality applied where the appellant had not filed a timely appeal. The present writ appeal was filed against that dismissal.

Issues Involved

  1. Whether an appellant who failed to file a statutory appeal against a GST registration cancellation order within the limitation period, including the condonable period, can bypass the statutory scheme by invoking writ jurisdiction on grounds of alleged violation of natural justice.

Petitioner's Arguments

  • The initial cancellation of registration was vitiated because no notice was served on the appellant prior to cancellation, amounting to a violation of natural justice that justified writ intervention despite the delay in filing the statutory appeal.

Respondent's Arguments

  • The Government Pleader supported the learned Single Judge's reasoning that the statutory scheme of finality under the GST Act barred entertaining a challenge once the appellant had approached the appellate authority beyond the condonable limitation period.

Court Order / Findings

  • The alleged illegal cancellation, including any breach of natural justice, was very much a matter that could and should have been urged in a duly constituted appeal filed within time under the GST Act.
  • Where an appellant approaches the appellate authority beyond even the condonable period of limitation prescribed under the GST Act, the statutory scheme of finality applies, and a writ court will ordinarily decline to entertain a challenge to the underlying order on grounds -- including natural justice -- that could have been raised in a timely appeal.
  • Relying on Assistant Commissioner (CT) LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Limited and ONGC v. Gujarat Energy Transmission Corporation, the Division Bench held the Single Judge correctly followed settled law, and found no reason to interfere.
  • The writ appeal was dismissed.

Important Clarification

  • Natural justice objections to a GST registration cancellation order must be raised through the statutory appeal under Section 107 within the prescribed limitation, including the condonable period; once that period lapses, the order attains finality under the statutory scheme, and a writ court will not ordinarily entertain a belated collateral challenge on the same grounds.

Sections Involved

  • Section 107, CGST Act, 2017 - appeal to Appellate Authority, with prescribed and condonable limitation periods.
  • Section 29, CGST Act, 2017 - cancellation of registration.

Decision – In Favour of

The writ appeal was dismissed, in favour of the Department.

Case Details

Court: High Court of Kerala at Ernakulam
Case No.: WA No. 1383 of 2023 (against judgment in WP(C) 15574/2023)
Coram: Justice A.K. Jayasankaran Nambiar and Justice Mohammed Nias C.P.
Date of Order: 02.08.2023

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