High Court Reinstates Tax Appeal by Excluding COVID-19 Period, Directs Reconsideration of Case Within One Month

The HC allowed the writ petition challenging registration cancellation. The court found the appeal was within prescribed time limits due to COVID-19 related limitation exclusions from 15.03.2020 to 28.02.2022. The HC set aside the first appellate authority's order and directed reconsideration of the appeal on merits within one month, providing relief to the petitioner in a tax-related dispute.

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Issues:
1. Cancellation of registration by Assistant Commissioner, CGST, Sector-3, Gautam Budh Nagar.
2. Dismissal of appeal by first appellate authority on the ground of being time-barred.

Analysis:
1. The writ petition challenged the cancellation of registration by the Assistant Commissioner and the dismissal of the appeal by the first appellate authority due to being time-barred. The petitioner, engaged in manufacturing and sales of machinery parts, had filed returns until October 2019. However, a show cause notice was issued by the department, which went unaddressed by the petitioner, leading to the cancellation of registration on 24.10.2019. An appeal under Section 107 of the Central Goods and Services Tax Act, 2017 was filed on 09.06.2022. The first appellate authority dismissed the appeal citing that the appeal was beyond the 90-day limitation period prescribed under the Act, with the last date being 23.01.2020.

2. The petitioner argued that the period from 15.03.2020 to 28.02.2022 was excluded for limitation purposes based on an order of the Apex Court dated 10.01.2022. According to the petitioner, the limitation period started from 01.03.2022, and the appeal filed on 09.06.2022 was within the prescribed time. The petitioner relied on the Apex Court's decision in Writ-C No. 03 of 2020 and cited other relevant cases. The respondent's counsel did not contest the legal proposition established by the Apex Court.

3. After considering the arguments and the Apex Court's order dated 10.01.2022, the court found that the petitioner's appeal was filed within the allowable time frame as per Section 107 of the Act of 2017. Consequently, the court set aside the first appellate authority's order dated 29.07.2022 and directed the appellate authority to reconsider the appeal on its merits within one month from the date of receiving a certified copy of the court's order. The writ petition was partly allowed, providing relief to the petitioner in this matter.

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