2022 (11) TMI 679 - HC - GST

GST Registration Restored: Petitioner Wins Appeal Despite Procedural Challenges and Auditor's Demise

HC allowed petitioner's appeal challenging GST registration cancellation. Despite delay caused by auditor's demise and non-receipt of show cause notice, ... Condonation of delay under Article 226 - Power to condone delay where appellate authority lacks jurisdiction - Restoration of GST registration - Cancellation of registration for non-response to show cause notice - Payment of outstanding dues and filing of returns as condition for restorationCondonation of delay under Article 226 - Power to condone delay where appellate authority lacks jurisdiction - High Court may condone delay in preferring an appeal where the appellate authority has no power to do so, by exercising its powers under Article 226. - HELD THAT: - The Court accepted the petitioner's specific explanation that the untimely demise of his auditor and consequent bonafide, unavoidable circumstances prevented timely payment of GST, filing of returns and preferring the appeal. While the 1st respondent (appellate authority) lacks power to condone delay under the statutory regime, this Court held that it is open to exercise its constitutional jurisdiction under Article 226 to condone such delay in an appropriate case. Applying a justice oriented approach and finding the explanation sufficient, the Court concluded that delay ought to be condoned and the consequences of non compliance addressed by restoring rights subject to statutory compliance. [Paras 5]Delay in preferring the appeal is condoned by the High Court on the stated bonafide grounds.Restoration of GST registration - Cancellation of registration for non-response to show cause notice - Payment of outstanding dues and filing of returns as condition for restoration - Impugned orders cancelling registration and dismissing the appeal are set aside and the petitioner's GST registration is to be restored subject to payment of dues and opportunity to file returns. - HELD THAT: - On accepting the petitioner's explanation for non receipt of the show cause notice and failure to respond or attend personal hearing, the Court set aside the order of cancellation dated 15.03.2022 and the appellate order dated 06.10.2022 which had declined condonation. The Court directed restoration of GST registration forthwith, while permitting the petitioner to file outstanding GST returns; the respondents are to allow such filings and proceed in accordance with law after the petitioner pays all outstanding dues. The Court framed restoration as conditional upon compliance with statutory obligations, thereby balancing the petitioner's bonafide explanation with the requirement of payment and procedural regularisation. [Paras 5, 6]Impugned orders are set aside; registration restored; petitioner may file returns and must pay outstanding dues, after which respondents shall proceed in accordance with law.Final Conclusion: Writ petition allowed; appellate and cancellation orders set aside; GST registration of the petitioner restored forthwith; petitioner permitted to file outstanding returns and must pay all dues, with respondents to proceed thereafter in accordance with law. Issues:1. Delay in filing appeal due to untimely demise of Auditor.2. Non-receipt of show cause notice leading to cancellation of GST registration.3. Appeal for condonation of delay dismissed by appellate authority.4. Jurisdiction of High Court to condone delay under Article 226 of the Constitution.5. Justification for condoning delay based on bonafide reasons and unavoidable circumstances.Analysis:1. The petitioner sought relief to set aside the order dated 06.10.2022 and allow the appeal filed on 16.08.2022 due to the untimely demise of the Auditor, leading to delayed GST payments and non-receipt of the show cause notice, resulting in the cancellation of GST registration. The petitioner argued that the delay in filing the appeal should be condoned due to these circumstances.2. The petitioner contended that the delay in filing the appeal was a result of not being aware of the show cause notice or the proceedings, as the notice was not received due to the spam filter in the email account. Consequently, the petitioner could not attend the personal hearing or respond to the notice, leading to the cancellation of GST registration by the respondent. The petitioner appealed for the restoration of GST registration.3. The appellate authority dismissed the appeal, refusing to condone the delay beyond the prescribed period under Section 107 of the CGST Act. The petitioner approached the High Court, arguing that while the appellate authority may not have the power to condone the delay, the High Court can exercise its powers under Article 226 of the Constitution to condone the delay, citing relevant legal precedents.4. The High Court acknowledged that the appellate authority lacked the power to condone the delay but emphasized that the Court could intervene under Article 226 of the Constitution. Considering the petitioner's explanation for the delay in filing returns and making payments, the Court accepted the reasons as genuine, justifying the condonation of delay and setting aside the impugned orders.5. Ultimately, the High Court allowed the petition, setting aside the orders dated 06.10.2022 and 15.03.2022, directing the restoration of GST registration, and permitting the petitioner to file GST returns upon payment of outstanding dues. The Court's decision was based on a justice-oriented approach, accepting the petitioner's justifications for the delay and ordering relief accordingly.