GST Registration Cancellation Order Overturned: Appellate Authority Directed to Reconsider Appeal with Proper Evaluation of Delay Reasons

HC allowed petitioner's challenge to GST registration cancellation order. The court found the Appellate Authority improperly rejected the appeal without considering valid reasons for delay in filing. The matter was remanded for fresh consideration, with directions to dispose of the appeal within six weeks, thereby providing relief to the petitioner under Section 107 of CGST Act.

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Issues:
Challenge to Order-in-Appeal rejecting appeal against GST registration cancellation due to delay in filing appeal.

Analysis:
The petitioner challenged an Order-in-Appeal dated 08.05.2024, which rejected their appeal against the cancellation of GST registration due to a delay in filing. The cancellation order was issued on 11.07.2023 following a Show Cause Notice dated 08.05.2023. The cancellation order did not specify reasons for the action taken. The petitioner's appeal against the cancellation order was rejected on 04.11.2023, leading to the subsequent challenge. The petitioner filed the appeal on 09.02.2024 under Section 107 of the CGST Act, albeit six days beyond the prescribed three-month period. The petitioner explained the delay by citing a ticket raised for rectification under Section 161 of the CGST Act, hoping for resolution through rectification. However, the explanation was not considered in the impugned order.

The court noted that under Section 107(4) of the CGST Act, the Appellate Authority has the power to condone a delay in filing an appeal by one month. Despite this provision, the Appellate Authority did not assess whether the delay was due to sufficient cause and failed to exercise its power to condone the delay. The court found that the petitioner had provided valid reasons for the delay, which warranted condonation. Consequently, the impugned Order-in-Appeal was set aside, and the matter was remanded to the Appellate Authority for a fresh consideration on merits. The Appellate Authority was directed to expedite the process and ideally dispose of the appeal within six weeks. As a result, the petition was allowed in the mentioned terms, and any pending applications were also resolved.

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