Facts of the Case

  • Petitioners were registered entities under GST but failed to file returns due to circumstances such as COVID-19 disruptions and administrative issues.
  • Show Cause Notices (SCNs) were issued for non-compliance.
  • GST registrations were cancelled, in several cases retrospectively.
  • Appeals filed by the petitioners were dismissed by the Appellate Authority solely on the ground of limitation under Section 107.
  • Petitioners approached the Delhi High Court challenging:
    • Retrospective cancellation
    • Denial of opportunity of hearing
    • Rejection of appeals on limitation

Issues Involved

  1. Whether delay beyond the statutory limitation under Section 107 CGST Act can be condoned by the Court.
  2. Whether retrospective cancellation of GST registration is valid in law.
  3. Whether dismissal of appeals purely on limitation violates principles of natural justice.
  4. Whether writ jurisdiction can be exercised despite availability of alternate remedy. 

Petitioner’s Arguments

  • Delay occurred due to exceptional circumstances (COVID-19, professional lapses, etc.).
  • Retrospective cancellation is arbitrary and affects past transactions and third parties.
  • SCNs were vague and no proper opportunity of hearing was granted.
  • Strict limitation should not override principles of natural justice.
  • Relied on precedents where courts allowed restoration of GST registration.

Respondent’s Arguments

  • Section 107 prescribes a strict limitation period (3 months + 1 month condonable) which cannot be extended.
  • Appellate Authority has no jurisdiction beyond statutory timeline.
  • Petitioners were negligent and guilty of delay (laches).
  • Writ petitions should not be entertained due to availability of alternate remedy.

Court’s Findings / Order

  • The Court held that statutory limitation under Section 107 is absolute and non-extendable.
  • Appeals filed beyond the prescribed period cannot be revived through writ jurisdiction.
  • However, the Court recognized that:
    • Retrospective cancellation may have serious consequences on past transactions.
  • The Court emphasized:
    • Authorities must ensure proper reasoning and adherence to procedure while cancelling registration.
  • In appropriate cases, limited relief or directions were issued depending on facts, but general interference was declined.

Important Clarifications by Court

  • Limitation under GST law is mandatory, not directory.
  • High Courts will not routinely bypass statutory remedies.
  • Retrospective cancellation must be justified and not mechanical.
  • Natural justice must be followed, but cannot override statutory limitation.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/61007022025CW142792024_153651.pdf

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