Court Overturns Order, Enables Taxpayer Compliance & Business Continuity Amid Pandemic Challenges.

The HC set aside the Appellate Order dated 07.10.2021, allowing the petitioner to file returns and pay due taxes, interest, penalty, and late fees within 60 days. Compliance permits application for revocation of cancellation within 7 days, which must be favorably considered. The GST Network must ensure no technical issues. The process must conclude within 90 days, balancing legal compliance with pandemic-related difficulties. The writ petition was allowed, recognizing the petitioner's right to carry on business under Article 19(1)(g) and the right to livelihood under Article 21, emphasizing the GST regime's role in facilitating business.

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Issues Involved:
1. Cancellation of GST Registration.
2. Appeal against cancellation and its rejection due to delay.
3. Legal provisions and notifications relevant to the case.
4. Extraordinary jurisdiction under Article 226/227 of the Constitution.
5. Impact of COVID-19 pandemic on legal deadlines.
6. Right to carry on business and constitutional rights.

Detailed Analysis:

1. Cancellation of GST Registration:
The petitioner, a proprietorship concern, challenged the cancellation of its GST registration by the Superintendent, Berhampur-I Range, under Section 29(2)(c) of the CGST Act due to non-filing of returns for six consecutive months. The cancellation was effective from 15.10.2019.

2. Appeal Against Cancellation and Its Rejection Due to Delay:
The petitioner filed an appeal against the cancellation order on 05.08.2021, which was delayed by around 660 days. The appeal was rejected on 07.10.2021 by the Appellate Authority on the grounds of limitation. The petitioner argued that the Appellate Authority should have considered the genuine difficulties faced due to the pandemic and the various notifications extending deadlines.

3. Legal Provisions and Notifications Relevant to the Case:
The petitioner referenced several notifications and amendments, including Notification No.19/2021-Central Tax, dated 01.06.2021, and Notification No.34/2021-Central Tax, dated 29.08.2021, which provided relief and extended timelines for filing returns and applications for revocation of cancellation. The petitioner argued that these notifications were intended to assist taxpayers affected by the pandemic and should have been considered by the Appellate Authority.

4. Extraordinary Jurisdiction Under Article 226/227 of the Constitution:
The petitioner invoked the extraordinary jurisdiction of the High Court under Article 226/227, arguing that the Appellate Authority's rejection of the appeal on technical grounds of limitation was unjust, especially given the pandemic's impact. The High Court noted that the Appellate Tribunal under Section 109 of the CGST Act had not been constituted, leaving the petitioner without an alternative remedy.

5. Impact of COVID-19 Pandemic on Legal Deadlines:
The Court acknowledged the unprecedented impact of the COVID-19 pandemic on legal proceedings and deadlines. The Supreme Court had extended limitation periods due to the pandemic, recognizing the extraordinary circumstances. The High Court found that the Appellate Authority failed to consider these extensions and the relevant notifications.

6. Right to Carry on Business and Constitutional Rights:
The Court emphasized that the cancellation of GST registration affected the petitioner's right to carry on business, protected under Article 19(1)(g) of the Constitution. Denying the petitioner the opportunity to restore its registration would violate its right to livelihood under Article 21. The Court cited various judgments supporting the view that the GST regime should facilitate business rather than hinder it.

Conclusion:
The High Court set aside the Appellate Order dated 07.10.2021 and issued the following directions:
1. The petitioner is permitted to file returns and pay the due taxes, interest, penalty, and late fees within 60 days.
2. Payment must be made without utilizing any unclaimed Input Tax Credit.
3. Upon compliance, the petitioner can file an application for revocation of cancellation within 7 days, which the proper officer must consider favorably.
4. The GST Network must ensure no technical glitches during this process.
5. The entire process must be completed within 90 days.
6. The concerned authority may verify the claims made in the returns and take appropriate actions as per law.

The writ petition was allowed, emphasizing the need to balance legal compliance with the practical difficulties faced by taxpayers, especially during the pandemic.

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