2022 (9) TMI 609 - HC - GST

Registration cancellation overturned due to improper ex-parte proceedings and incorrect limitation period calculation during COVID suspension

The Allahabad HC allowed a petition challenging the cancellation of registration on grounds of time limitation. The petitioner's registration was ... Cancellation of registration of petitioner - time limitation - no date of hearing has been fixed by the show cause notice issued for cancellation of registration and registration - cancellation of ex-parte order - principles of natural justice - HELD THAT:- Reliance placed in the case of M/S SINGH GROUP VERSUS STATE OF U.P. AND 2 OTHERS [2022 (8) TMI 97 - ALLAHABAD HIGH COURT] where it was held that Once the Government exercised its powers and reached a satisfaction (that there were defects on the common portal with respect to service of orders) and, provided relaxation of limitation, by suspending the period of limitation with respect to orders passed up to 12 June, 2020 and placed the date of any order passed up to that date, to be 31.08.2020 (on deemed basis) and further since the Government Notification dated 29.08.2021 suspended the period of limitation to file revocation applications for the period 01.03.2020 to 31.08.2021, it may never have been said that such an application if filed by the petitioner within the extended period of limitation, on 18.09.2021, would have been beyond time. The Appellate Authority has clearly erred in rejecting the appeal as time barred, the order dated 27.5.2022 is set aside and the matter is remitted to Appellate Authority to pass a fresh order strictly in accordance with law treating the appeal filed by the petitioner within limitation - petition allowed. Issues:1. Appeal against the order of cancellation of registration dismissed as time-barred.2. Violation of principles of natural justice in cancellation of registration.3. Interpretation of limitation period for filing appeals in GST cases.Analysis:1. The petitioner challenged the order dismissing the appeal against the cancellation of registration as time-barred. The respondent upheld the cancellation, citing the appeal as beyond the limitation period. The petitioner argued that the order of cancellation was dated 9.8.2021, available on the GST portal, and no other cancellation order exists. The petitioner contended that the registration was cancelled ex-parte on 24.2.2019 without a fixed date of hearing, violating principles of natural justice.2. The petitioner highlighted discrepancies in the show cause notice and the subsequent cancellation order, indicating a lack of procedural fairness. Reference was made to a similar case, M/S. Singh Group, where the court allowed the writ petition against a similar order. The court emphasized the importance of adherence to natural justice principles in such matters.3. The court delved into the interpretation of the limitation period for filing appeals in GST cases. The petitioner argued that even if the cancellation order date was considered as 11.09.2019, the appeal filed on 18.09.2021 was within the limitation period. The petitioner relied on relevant orders and notifications to support the argument that the limitation period for seeking revocation of the cancellation order was extended up to 30.09.2021.4. The court analyzed the government's intent in granting relaxation of limitation periods due to technical issues and external factors like the COVID-19 pandemic. It emphasized that such relaxation should apply uniformly to both revocation applications and appeal proceedings to avoid inconsistencies and ensure fairness. The court criticized the appellate authority for erroneously rejecting the appeal as time-barred and set aside the order, directing a fresh decision in accordance with the law.In conclusion, the court allowed the writ petition, extending the benefit of a similar judgment to the present petitioner and directing the appellate authority to reconsider the appeal within the limitation period. The judgment emphasized the importance of procedural fairness, adherence to statutory remedies, and the uniform application of limitation periods in GST appeal cases.