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of <h1>GST registration cancellation appeal allowed despite delay as authority failed to prove proper service of order</h1> The Allahabad HC allowed a petition challenging GST registration cancellation where the appeal was filed after four months. The HC held that the appellate ... Cancellation of GST registration of petitioner - appeal barred by limitation or not - appeal was filed after a period of four months - HELD THAT:- The mandatory prerequisites for reckoning the start point of period of limitation are these. The authority has to make a finding in regard to the mode of copy of the order and also whether service upon the concerned person is complete. Secondly the authority has to record its satisfaction that the order has been 'communicated to the assessee/person'. The impugned order does not reference the mode of service of the order nor does it record its satisfaction of service in the order. The finding that the order was 'communicated to the assessee/person' is also absent. Learned tribunal was misdirected in law, inasmuch as, it neglected to record its satisfaction of the mandatory prerequisites for triggering the clock of limitation. The impugned order dated 28.09.2022 passed by the respondent No.2/learned appellate authority is liable to be set aside and is set aside - matter is remitted to the learned appellate authority for fresh adjudication in accordance with law - Petition allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether the period of limitation for filing an appeal under Section 107 begins from the date an order is 'communicated to such person', and what constitutes commencement of limitation for that purpose. 2. Whether an appellate authority must record the mode of service and its satisfaction that an order has been 'communicated to the person' before treating an appeal as barred by limitation under Section 107 read with Section 169. 3. Whether rejection of an appeal on the sole ground of delay, without recording requisite findings about service/communication, is legally sustainable. 4. Whether, in cases of cancellation of GST registration, broader policy considerations and precedents permitting restoration of registration in appropriate cases should guide the authority on reconsideration. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Commencement of limitation under Section 107: legal framework Legal framework: Section 107(1) prescribes that appeals to the Appellate Authority must be filed 'within three months from the date on which the said decision or order is communicated to such person'; Section 107(4) permits condonation up to one additional month on satisfaction of 'sufficient cause'. Section 169 governs modes of service and deems service to have occurred on the date of tender, publication, affixation or, where sent by post, at the expiry of normal transit time unless contrary is proved. Precedent Treatment: Earlier decisions have interpreted 'communicated to such person' to require actual bringing of the order to the knowledge of the aggrieved person such that the limitation clock legitimately starts (citing earlier High Court considerations as followed). Interpretation and reasoning: The Court holds that the limitation period commences only when the order is effectively 'communicated to such person' in the sense contemplated by Section 169 - i.e., when service is effected by one of the prescribed modes and the authority is satisfied that communication has occurred. Merely passing an order without recording communication/service does not trigger the limitation period. Ratio vs. Obiter: Ratio - the start point of limitation is communication as per Section 169 and must be factually determined; Obiter - observations on policy implications of late appeals beyond statutory periods. Conclusion: The limitation under Section 107 begins only upon communication as established by mode of service under Section 169 and upon a recorded satisfaction to that effect. Issue 2 - Requirement to record mode of service and satisfaction before treating appeal as time-barred Legal framework: Section 169 prescribes modes of service and deeming provisions; Section 107 requires appeal within a specified period from communication. Administrative orders must specify modes of service to trigger statutory timelines. Precedent Treatment: The Court relies on prior High Court observations requiring authorities to ascertain and record service/communication before treating the limitation as running (following earlier judgments that construed the statutory requirement strictly in favor of ensuring knowledge of the order). Interpretation and reasoning: The Court reasons that prerequisites for reckoning limitation are mandatory: the authority must (i) make a finding regarding the mode by which a copy of the order was served and (ii) record its satisfaction that the order was communicated to the concerned person. Absence of such findings means the limitation was not appropriately triggered. Ratio vs. Obiter: Ratio - recording mode of service and satisfaction of communication is a mandatory prerequisite to start limitation; Obiter - none of significance beyond explanation of statutory mechanics. Conclusion: Authorities must record mode of service and satisfaction of communication under Section 169 before holding an appeal barred by limitation under Section 107; failure to do so vitiates a limitation-based rejection. Issue 3 - Validity of rejecting appeal solely on limitation without required findings Legal framework: Section 107(1)-(4) and Section 169 read together require proper service/communication findings and allow narrow discretion to condone delays up to one month on sufficient cause. Precedent Treatment: The Court distinguishes prior administrative rejections that recorded service; it follows authorities that have set aside decisions where such findings were absent. Interpretation and reasoning: The impugned appellate order omitted any reference to the mode of service, any recording of satisfaction of service, and the express finding that the order was 'communicated to the assessee/person'. Such omission is a legal misdirection because it precludes establishing the factual trigger for limitation and denies the appellant the benefit of statutory safeguards including consideration under Section 107(4). Ratio vs. Obiter: Ratio - rejection of appeal as time-barred without recording requisite service/communication findings is impermissible and warrants setting aside; Obiter - guidance that tribunals must consider condonation when applicable. Conclusion: The appellate authority's rejection on limitation grounds without the mandatory findings is unsustainable and necessitates remand for fresh adjudication. Issue 4 - Guidance on cancellation of registration and restoration considerations Legal framework: Statutory scheme contemplates cancellation of registration and also mechanisms to ensure compliance; broader policy of GST regime seeks to integrate compliant dealers into tax net to protect revenue. Precedent Treatment: The Court refers to persuasive decisions emphasizing that restoring registration may better serve revenue and public interest where revival does not prejudice the department and safeguards exist to prevent abuse. Interpretation and reasoning: While determining cancellation-related appeals, the authority must be guided by the principle that permitting revival of registration may further revenue collection and avoid unfair deprivation of taxpayers' right to trade legitimately. The Court directs consideration of such policy-linked precedents in the fresh adjudication so that relief, if appropriate, is not denied merely on procedural timelines. Ratio vs. Obiter: Obiter guidance primarily - instructive on approach to cancellation matters and policy considerations; not a binding alteration of statutory framework but to be taken into account on remand. Conclusion: On remand the appellate authority should consider policy considerations and relevant precedents favoring restoration where appropriate, subject to safeguards and legal requirements. Remedial Direction and Outcome Since the appellate order failed to record mode of service and satisfaction of communication, it was set aside and the matter remitted for fresh adjudication in accordance with law, applying the principles above and giving hearing to the appellant within a stipulated period.
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