Appeal allowed due to COVID-19 delay; GST registration cancelled incorrectly. Compliance leads to revocation.

The appeal was allowed based on the extension of the limitation period due to the COVID-19 pandemic, condoning the delay in filing. The cancellation of the appellant's GST registration and the determination of tax liability were found to be incorrect as the proper assessment procedure under Section 62 was not followed. The appellant's compliance by filing pending returns and willingness to pay government dues led to the direction for revocation of registration. The adjudicating authority was instructed to verify payments and recover any dues, with the appellant required to cooperate during verification.

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Issues Involved:
1. Timeliness of the appeal filing.
2. Validity of the cancellation order and determination of tax liability.

Detailed Analysis:

1. Timeliness of the Appeal Filing:
The appellant filed the appeal under Section 107(1) of the CGST Act, 2017, with a delay of 10 months and 11 days. The statutory provisions under Section 107(1) and (4) of the Act allow for an appeal to be filed within three months, with a possible extension of one month if the appellant shows sufficient cause. The delay beyond this period is non-condonable as per the Act.

However, the Hon'ble Supreme Court, in Suo Motu Writ Petition (Civil) No.3 of 2020, extended the limitation period due to the COVID-19 pandemic. The period from 15.03.2020 to 02.10.2021 was excluded from the limitation period. Consequently, the appellant's delay was condoned based on this extension, allowing the case to be decided on its merits.

2. Validity of the Cancellation Order and Determination of Tax Liability:
The Proper Officer issued a show cause notice (SCN) on 04.02.2020 for non-filing of returns for six consecutive months, leading to the cancellation of the appellant's GST registration on 21.07.2020 and determination of a tax liability of Rs. 79,720/- CGST and Rs. 79,720/- interest.

The appellant contested the demand on several grounds:
- The tax payable was calculated incorrectly.
- The demand was assessed in the cancellation order without following the procedure under Section 62 of the CGST Act.
- The demand was arbitrary and not based on any business activity during the period.
- The order was not a speaking order and lacked reasoning.
- The appellant's business was affected by COVID-19, preventing timely filing of returns.

The adjudicating authority determined the tax liability based on the average tax payment from April 2018 to March 2019. However, the appellant argued that no business was conducted during the period in question, and the assessment should have followed the provisions under Section 62 and Rule 100 of the CGST Rules, 2017.

Legal Provisions and Observations:
- Section 39 mandates the filing of returns and payment of tax by the due date. The appellant failed to comply, leading to the issuance of the SCN and subsequent cancellation of registration.
- Section 62 provides for the assessment of non-filers of returns. The proper officer should issue an assessment order in Form GST ASMT-13 and upload a summary in Form GST DRC-07. This procedure was not followed in the appellant's case, making the tax liability determination adhoc and incorrect.
- Rule 23 allows for the revocation of cancellation if the appellant furnishes all pending returns and pays the due tax, interest, penalty, and late fee.

The appellant filed all pending returns by 09.07.2021 and expressed willingness to comply with all government dues. The adjudicating authority's determination of tax liability without following the proper assessment procedure under Section 62 was found to be incorrect.

Conclusion:
The appeal was allowed, and the adjudicating authority was directed to consider the revocation of the appellant's GST registration. The proper officer was instructed to verify the payment particulars, status of returns, and recover any government dues. The appellant was directed to cooperate with the department during verification. The appeal was disposed of accordingly.

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