GST registration cancellation challenged successfully despite time limitation under Section 107 CGST/RGST Act

The Rajasthan HC allowed a writ petition challenging cancellation of GST registration on grounds of time limitation. The court held that while statutory authorities are bound by limitation provisions under Section 107 of CGST/RGST Act, writ courts are not similarly constrained. The HC emphasized that appeals should normally be decided on merits and exercised discretion to condone delay, considering the legislative intention to facilitate commercial activities. The court restored the petitioner firm's appeal to original records, directing statutory authorities to entertain it despite expiry of limitation period.

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Issues:
1. Challenge to the cancellation of GST registration.
2. Interpretation of Section 107(4) of CGST/RGST Act, 2017.
3. Harmonization of Section 107(1) and Section 107(2) for equal period of limitation.
4. Condoning delay in filing appeal under Section 107(1) due to illness of petitioner's grandfather.

Analysis:

Challenge to the cancellation of GST registration:
The petitioner-firm sought relief against the cancellation of its GST Registration, citing the issuance of a show cause notice for non-filing of monthly returns and subsequent cancellation order. The petitioner argued that due to the illness of the proprietor's grandfather, they could not file an appeal in time, leading to the cancellation of registration. The Court considered the circumstances and medical evidence provided, concluding that the petitioner should be given an opportunity to contest the matter on merits for restoration of its GST Registration.

Interpretation of Section 107(4) of CGST/RGST Act, 2017:
Initially, the petitioner challenged the provisions of Section 107(4) of the CGST/RGST Act, 2017, which limit the power of the Appellate authority to entertain first appeals beyond a specified period. However, during the proceedings, the petitioner decided not to press this alternative prayer, leaving the challenge to this provision open for future consideration.

Harmonization of Section 107(1) and Section 107(2) for equal period of limitation:
The petitioner requested the harmonization of Section 107(1) and Section 107(2) to allow both the petitioner/assessee and the Department equal periods of limitation of six months for preferring the first appeal. However, this issue was not pressed further, and the focus shifted to the main challenge against the cancellation of GST registration.

Condoning delay in filing appeal under Section 107(1) due to illness of petitioner's grandfather:
The petitioner provided medical records and certificates to demonstrate that the delay in filing the appeal under Section 107(1) was due to the illness of the proprietor's grandfather. The Court acknowledged the reasons provided and exercised its powers under Article 226 of the Constitution of India to condone the delay and direct the statutory authority to entertain the appeal beyond the prescribed period of limitation.

In conclusion, the High Court allowed the writ petition, restoring the appeal to its original records and providing the petitioner-firm with an opportunity to contest the matter on merits for the restoration of its GST Registration.

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