2023 (1) TMI 380 - HC - GST

High Court Reinstates GST Registration Appeal, Overrides Technical Delays and Mandates Comprehensive Reconsideration Amid Pandemic Challenges

HC ruled in favor of petitioner challenging GST registration cancellation. Despite delayed appeal, the court directed first Appellate Authority to ... Cancellation of registration of petitioner - delay in filing of appeal before the first Appellate Authority - HELD THAT:- Without entering into the merits of the case, this Court finds that as the GST regime was introduced PAN India in the year 2017, there was some teething problem in its implementation. The Government was inviting suggestion and making improvement in the functioning of the provisions of the said Act - Looking to the fact that the appeal has been filed by the Assessee-petitioner at a delayed stage and in between the COVID-19 pandemic had intervened, taking sympathetic view, this Court finds that the Assessee cannot be left remediless and the Appellate Authority should have entertained the appeal and decided the same on merits. The business cannot be hampered and suffered on mere technicalities of law and the Appellate Authority should have considered the appeal on merits. The order passed by first Appellate Authority dated 04.09.2021 is unsustainable in the eyes of law and the same is hereby set aside. The matter is remitted back to the first Appellate Authority to reconsider the appeal of the Assessee-petitioner on merits and decide the same strictly in accordance with law without going into the question of limitation, preferably within a period of one month from the date of production of certified copy of this order before him - Petition disposed off. Issues:1. Cancellation of Goods and Service Tax registration.2. Delayed appeal before the first Appellate Authority.3. Interpretation of provisions for filing revocation application or statutory appeal.4. Extension of time for filing appeal due to COVID-19 pandemic.5. Merits of the case and consideration by the Appellate Authority.Analysis:1. The petitioner challenged the cancellation of their GST registration by respondent No.2, which was upheld by the first Appellate Authority due to a delayed appeal. The Assessee failed to respond to a show cause notice within the stipulated time, leading to the cancellation of registration on 01.10.2019.2. The appeal against the cancellation was filed belatedly on 14.4.2021, and the first Appellate Authority dismissed it on grounds of limitation. The petitioner argued that a revocation application could have been filed under Section 30 of the Central Goods and Services Tax Act, 2017, with an extended deadline till 30th September, 2020, as per a government notification.3. The petitioner contended that the notification extending the revocation application deadline should also apply to the appeal filing period, citing a previous court decision. However, the Standing Counsel argued that the revocation provision cannot be equated with the appeal provision under Section 107 of the Act, and the notification was prospective, not retrospective.4. The Court acknowledged the challenges during the GST regime's implementation in 2017 and the impact of the COVID-19 pandemic on legal procedures. Considering these factors, the Court opined that technicalities should not impede business operations, and the Appellate Authority should have considered the appeal on its merits.5. The Court set aside the first Appellate Authority's order, remitting the matter for reconsideration on merits without focusing on the limitation issue. The Appellate Authority was directed to decide the appeal within one month of receiving a certified copy of the Court's order. The writ petition was disposed of accordingly.