2022 (7) TMI 1230 - HC - GST

Appeal time limit extended due to COVID-19 under Section 107 CGST Act despite dismissal

The Delhi HC allowed the petition challenging an order dismissing an appeal as time-barred. The court held that under Section 107 of CGST Act, 2017, the ... Extension of period of limitation by Supreme Court orders in Suo Motu Writ Petition (Civil) No.3/2020 - condonable period of limitation - compute exclusion of limitation periods arising from COVID 19 orders - requirement of signature or digital signature on notices/orders made available on the common portal - principles of natural justice in proceedings for cancellation of registration - reinstatement of appeal and remand for fresh hearing with notice specifying date, time, venue and modeExtension of period of limitation by Supreme Court orders in Suo Motu Writ Petition (Civil) No.3/2020 - condonable period of limitation - compute exclusion of limitation periods arising from COVID 19 orders - Application of the Supreme Court's orders in Suo Motu Writ Petition (Civil) No.3/2020 to the limitation for filing the appeal under Section 107 of the CGST Act, including the condonable one month period. - HELD THAT: - The Court determined that the series of orders passed by the Supreme Court in Suo Motu Writ Petition (Civil) No.3/2020 extended and/or excluded from computation not only the prescribed period of limitation but also the condonable period. Applying that principle to the facts, the three month limitation under Section 107 and the additional one month condonable period were affected by the exclusion applicable from 15.03.2020. Consequently, the appellate authority's rejection of the appeal as time barred was contrary to the Supreme Court's directions and could not stand. [Paras 6, 7, 8]The Order in Appeal holding the appeal to be time barred was set aside as contrary to the Supreme Court's orders extending/excluding limitation periods.Requirement of signature or digital signature on notices/orders made available on the common portal - principles of natural justice in proceedings for cancellation of registration - Whether the SCN dated 29.10.2019 and the order cancelling registration dated 25.11.2019-neither bearing an officer's signature on their face as uploaded on the common portal-precluded further adjudication and whether principles of natural justice were complied with. - HELD THAT: - The Court observed that Section 169(1)(d) permits making communications available on the common portal but that the provision does not, by plain reading, dispense with signatures. The Bench held that at the very least digital signatures ought to have been appended to the SCN and the order, given the grave implications for the assessee. However, rather than finally adjudicating these merits complaints, the Court directed that the concerned officer must address these and other contentions after hearing the petitioners' authorised representative. Thus, the questions of signature compliance and any infringement of natural justice were left to be determined afresh by the authority after giving the petitioner a hearing. [Paras 9, 10, 11]Findings on signature/digital signature and alleged procedural unfairness were not finally decided; the matter was remitted for fresh consideration after hearing.Reinstatement of appeal and remand for fresh hearing with notice specifying date, time, venue and mode - Relief to be granted following the setting aside of the Order in Appeal. - HELD THAT: - Because the appellate order was set aside as being inconsistent with the Supreme Court's limitations orders, the Court restored the appeal to the appellate forum. The authorised representatives are to be given an opportunity to canvass their case before the concerned officer. The authority was directed to issue a written notice specifying the date, time, venue and the mode of hearing (virtual or physical) so that the petitioners may be heard on the merits, including the procedural objections. [Paras 11]Appeal restored and matter remitted for fresh hearing with directions to issue a written notice specifying date, time, venue and mode of hearing.Final Conclusion: The appellate order rejecting the appeal as time barred was set aside because the Supreme Court's COVID 19 limitation orders applied to the condonable period; the appeal is restored and remitted for fresh consideration. Questions regarding signatures on the SCN/order and alleged breach of natural justice were left to be decided afresh by the authority after giving a written notice specifying date, time, venue and mode of hearing to the petitioners' authorised representatives. Issues:Challenge to appellate order on limitation period, challenge to show-cause notice and registration cancellation order, violation of principles of natural justice in show-cause notice, absence of signatures on show-cause notice and registration cancellation order, extension of limitation period due to Covid-19, compliance with procedure under CGST Rules.Analysis:The writ petition challenges the appellate order dated 28.06.2021, the show-cause notice (SCN) dated 29.10.2019, and the order cancelling the petitioners' registration. The Order-in-Appeal was based on the appeal being filed beyond the prescribed limitation period. The petitioners argue that the limitation period was extended by Supreme Court orders, and the SCN and cancellation order lacked signatures of the concerned authority. They also claim that the revenue should have issued a notice before cancelling registration due to non-filing of returns. The petitioners eventually filed their returns with late fees on 30.04.2021.The respondents argue that the petitioners did not file returns for a continuous six-month period, leading to the registration cancellation SCN. They assert that the prescribed procedure under CGST Rules was followed, and the petitioners should not be granted relief. They argue that the Supreme Court orders on limitation extension do not apply to the petitioners' case due to the timeline of non-filing returns predating Covid-19 restrictions.The High Court determines crucial dates for limitation calculation and references Supreme Court orders extending limitation periods due to Covid-19. The Court finds that the extension of limitation applied to the condonable period, contrary to the Order-in-Appeal dated 28.06.2021, which is set aside. The petitioners' assertions of violation of natural justice are noted, especially regarding the lack of venue indication in the SCN. The Court addresses the absence of signatures on the SCN and cancellation order, emphasizing that digital signatures should have been appended due to significant implications for the assessee.The Court sets aside the Order-in-Appeal, restores the appeal, and directs the concerned officer to hear the authorized representatives of the petitioners. The officer is instructed to issue a notice indicating the hearing details, including date, time, venue, and mode. The writ petition is disposed of accordingly, addressing the issues raised regarding limitation, procedural compliance, and natural justice.