GST registration cancellation challenge allowed despite time limit based on constitutional right to livelihood protection

The Punjab and Haryana HC allowed a petition challenging cancellation of GST registration filed beyond the prescribed time limit. The court relied on precedent from Aarcity Builders Private Limited case, holding that petitioner was entitled to benefit of notifications extending limitation periods. The court ruled that strict application of limitation would defeat the constitutional right to livelihood. HC directed that if petitioner files revocation application within 30 days of receiving certified copy, it would be deemed within limitation and decided on merits.

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Issues:
1. Cancellation of GST registration and rejection of appeal without entertainment.

Analysis:
1. The petitioner, an Assessee under the GST Act, sought a writ for quashing the order canceling his registration and rejecting his appeal without consideration. The petitioner, a Contractor under M/s. Indian Oil Corporation Ltd., Panipat, was inactive due to health reasons from April 2018 to April 2020. A show cause notice for cancellation was issued on 01.05.2019, citing discontinuation of business. The petitioner did not respond, leading to the cancellation order on 15.05.2019. The petitioner resumed business in June 2020 and filed an appeal against the cancellation order on 22.12.2021, which was rejected on 09.04.2022, citing delay in submission.

2. The petitioner's counsel argued for the entertainment of the appeal, citing a judgment highlighting the difficulties faced by taxpayers under the new GST Act. The judgment referred to various Amnesty Schemes introduced due to procedural unfamiliarity. A notification dated 23.04.2019 allowed applications for revocation of cancellation of registration under Section 30 until 22.07.2019 for orders passed up to 31.03.2019. Subsequent notifications extended these deadlines, considering challenges faced by taxpayers transitioning to the new system.

3. A notification on 29.08.2021 extended the time limit for revocation applications for cancellations between 01.03.2020 to 31.08.2021 until 30.09.2021. The respondents contended that this extension applied only to cases within the specified date range. The petitioner argued for a broader interpretation of the notification, considering the impact of the Covid-19 pandemic and the previous extensions granted. The Court agreed with the petitioner, emphasizing the need to protect the right to livelihood and ruled in favor of the petitioner.

4. The Court allowed the petition, directing the petitioner to submit an application/appeal for revocation of cancellation within 30 days of receiving the order copy. The Court deemed such submission within the limitation period and instructed for a decision on merits in accordance with the law. The judgment emphasized the importance of upholding constitutional principles and protecting individuals' rights in legal proceedings.

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