Cancellation of GST registration: High Court set aside dismissal and directed appellate authority to rehear appeal on merits.

Cancellation of GST registration for a security-services provider was challenged; Rule 23(1) requires furnishing returns and payment of tax, interest, penalty and late fee before seeking revocation. The court held that limitation's purpose is to protect statutory compliance and third party rights, but non-revocation of GST registration primarily prejudices the assessee and not third parties or revenue. A writ court has inherent power to condone delay; the high court set aside the appellate dismissal made on limitation grounds and directed the appellate authority to rehear the appeal on merits and pass fresh orders on revocation.

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Issues: (i) Whether the order of the Appellate Authority dismissing the appeal as time-barred should be set aside and the appeal re-heard in view of non-service/publishing of notice and delay; (ii) Whether the cancellation of GST registration should be considered for revocation upon payment of outstanding statutory dues and subject to statutory conditions under the CGST Act and Rules.

Issue (i): Whether the dismissal of the appeal under Section 107 of the Central Goods and Services Tax Act, 2017 as barred by limitation ought to be set aside and the appeal re-heard where the petitioner was not given effective personal notice and became aware of suspension/cancellation only after limitation had run.

Analysis: The Court considered the statutory limitation framework under Section 107 and related provisos, the effect of non-service or only website publication of notices on the running of limitation, and the writ Court's power to condone delay. The Court observed that limitation serves dual purposes of compliance and protection of third party rights, and that in the present facts cancellation prejudices primarily the assessee. Relying on the writ jurisdiction to condone delay where appropriate and to avoid multiplicity of proceedings, the Court found merit in permitting reconsideration on merits rather than allowing a dismissal on procedural limitation grounds to foreclose substantive adjudication.

Conclusion: The order dated 16.12.2025 of the Appellate Authority dismissing the appeal as time-barred is set aside and the appeal is to be re-heard on merits by the Appellate Authority.

Issue (ii): Whether revocation of cancellation of GST registration should be considered by the authorities upon compliance with statutory conditions, including deposit of outstanding dues and fulfillment of return-filing/payment requirements under the CGST Act and Rules.

Analysis: The Court examined Rule 23(1) of the Central Goods and Services Tax Rules, 2017 and the statutory scheme which conditions revocation on furnishing returns and payment of amounts due. The Court directed respondent authorities to inform the petitioner of outstanding statutory dues up to the date of cancellation and permitted revocation to be considered upon payment of such dues, with continued compliance thereafter. The Court emphasised that revocation and compliance facilitate revenue collection and do not prejudice third parties in the present factual matrix.

Conclusion: The respondent authorities are directed to intimate outstanding statutory dues to the petitioner and, upon payment of such dues and compliance with statutory conditions, to consider revocation of the cancellation of GST registration; the Appellate Authority shall decide the reheard appeal on merits.

Final Conclusion: The Court granted substantive relief to the petitioner by setting aside the appellate dismissal for limitation and directing a merits rehearing, together with administrative directions for intimation and payment of outstanding dues as a pre-condition for consideration of revocation; the writ petition is disposed accordingly.

Ratio Decidendi: A writ Court may condone statutory or quasi-judicial delay and remit a matter for merits consideration where non-service or defective service of statutory notice has impeded an assessee's ability to meet limitation, and where revocation of registration, subject to statutory payment and return conditions, does not prejudice third party rights and is in the interest of effective revenue administration.

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