2022 (7) TMI 1230 - HC - GST

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

Railsys Engineers Private Limited & Anr. Versus The Additional Commissioner Of Central Goods And Services Tax (Appeals-II) & Anr.

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 ... Condonation of delay in filing appeal - extension of condonable period - Validity of SCN and order cancelling the petitioners’ registration - case is that Order-in-Appeal passed by respondent no.1 is founded on the ground that the appeal was instituted beyond the prescribed period of limitation - HELD THAT:- Concededly, the period of limitation prescribed for filing the appeal under Section 107 of the CGST Act, 2017 is three months, which is amenable to extension by the period of one month by the Commissioner on sufficient cause being shown - The prescribed period of limitation would thus, end on 24.02.2020, with a one-month leeway available to the Commissioner to extend the period of limitation. The condonable period of one month, in this instance, would end on 24.03.2020. The extension of limitation applied even to the condonable period, and not just to the prescribed period of limitation under Section 107 of the Act - Even a plain reading of the provision does not suggest that the orders need not be signed. At the least, the respondents/revenue should have appended digital signatures on the SCN and the above-mentioned order, as it has grave implications for the assessee. The appeal preferred by the petitioners is restored - Petition disposed off. 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.