GST registration cancellation orders quashed despite time-barred appeals under Section 117 TNGST Act 2017

HC quashed GST registration cancellation orders despite appeals being time-barred under Section 117 of TNGST Act, 2017. While appellate authorities correctly rejected delayed appeals as they cannot exercise jurisdiction beyond statutory provisions, HC found overwhelming reasons to restore registrations. Petitioners' registrations were cancelled for non-filing of returns for six months under Section 29. Despite being given opportunities through Central Government notifications to revoke cancellations, petitioners failed to respond. HC held keeping petitioners outside GST regime serves no useful purpose and causes revenue leakage. Petitioners directed to file pending returns with tax, interest, and penalties within 45 days. Petition allowed with safeguards.

---

---

Issues Involved:

1. Challenge to the cancellation of GST Registrations under the Tamil Nadu Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017.
2. Rejection of appeals against the order of cancellation of GST registration due to being time-barred.
3. Rejection of applications for revocation of cancellation of GST Registration.

Detailed Analysis:

Issue 1: Challenge to the cancellation of GST Registrations

The petitioners challenged the cancellation of their GST registrations on various grounds, including the failure to file returns for a continuous period of six months. The court noted that the respondents had issued Show Cause Notices before canceling the registrations. The court emphasized that the cancellation orders were passed following due process, including providing the petitioners with an opportunity to be heard. The petitioners had the option to file an application for revocation of cancellation under Section 30 of the GST Acts within 30 days from the date of service of the cancellation order. However, many petitioners failed to avail this opportunity.

Issue 2: Rejection of appeals against the order of cancellation of GST registration due to being time-barred

The court observed that several petitioners filed appeals against the cancellation orders beyond the statutory period of limitation prescribed under Section 107 of the GST Acts. The appeals were rightly rejected as they were filed beyond the condonable period. The court referred to the Supreme Court's decision in M/s. Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and Others, (2008) 3 SCC 70, which held that statutory appeals filed beyond the statutory period for condonation of delay cannot be condoned. The court acknowledged that the appellate authorities acted in accordance with the law and could not exercise jurisdiction beyond the provisions of the Act.

Issue 3: Rejection of applications for revocation of cancellation of GST Registration

The court noted that some petitioners filed applications for revocation of cancellation of registration, which were rejected by the original authorities. The court highlighted the various notifications and circulars issued by the Central Government to address the difficulties faced by taxpayers due to the Covid-19 pandemic. These included extensions of time for filing applications for revocation of cancellation of registration. The court emphasized that the intention of the government was to facilitate the revival of registrations and not to debar taxpayers from coming back into the GST fold.

Conclusion:

The court concluded that the petitioners should be given an opportunity to revive their GST registrations to ensure compliance with the GST regime and avoid revenue loss to the government. The court quashed the impugned orders and granted relief to the petitioners subject to certain conditions, including filing returns for the period prior to the cancellation of registration, payment of tax, interest, and penalties, and compliance with statutory requirements. The court directed the respondents to take necessary steps to allow the petitioners to file their returns and pay the tax/penalty/fine within a specified period. The court emphasized that the provisions of the GST Acts should be interpreted to facilitate legitimate trade and commerce while ensuring tax compliance.

---