TaxTMI 
TaxTMI 
2026 (9) TMI 1418
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....of law, they were heard together and are adjudicated by this consolidated order. 2.0 The Appellant-Department (hereinafter referred to as "the Appellant"), being aggrieved by the orders impugned herein, has preferred the present appeals. The principal contention of the Appellant is that the First Appellate Authority ("FAA"), while passing each of the impugned orders, exceeded the jurisdiction vested in it under Sections 107(1) and 107(4) of the Act by condoning the delay beyond the maximum period prescribed thereunder. It is, therefore, contended that the impugned orders are vitiated by a patent error of jurisdiction, are contrary to the express statutory mandate, and are consequently liable to be set aside. 3.0 All the Respondents herein are registered taxpayers under the Act. They had failed to furnish their monthly GSTR-3B returns continuously for a period of six months. Such persistent default attracted the provisions of Rule 21(h) of the Central Goods and Services Tax Rules, 2017 ("the Rules"), read with Rule 22(3) thereof and Section 29(2)(c) of the Act, thereby warranting cancellation of their registrations suo motu. 3.1 Under the statutory scheme, the Respondent-ta....
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....eal from the date of communication of the impugned order, while Section 107(4) empowers the FAA to condone delay only for a further period of one month, subject to the existence of sufficient cause. 5.1 The Appellant contends that the power of condonation conferred upon the FAA is circumscribed by the express language of Section 107(4) of the Act and that the FAA has no jurisdiction to entertain, or condone the delay in, an appeal presented beyond the maximum period prescribed therein. It is further contended that the FAA could not, by relying upon the judgment of the Hon'ble High Court of Telangana in M/s. Southern Enterprises v. State of Telangana, assume a jurisdiction which has not been conferred upon it by the statute. 5.2 On the aforesaid premise, the Appellant seeks setting aside of the impugned orders on the ground that they have been passed without jurisdiction and in disregard of the statutory limitation prescribed under Sections 107(1) and 107(4) of the Act. 6.0 Upon a comprehensive consideration of the pleadings, submissions, and material placed on record, the following two questions arise for determination in these appeals: (i) Whether the FAA was jus....
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....y beyond the outer limit prescribed under the statute, nevertheless proceeded, in the peculiar facts and circumstances of the case before it, to condone the delay and remand the matter for adjudication on merits in accordance with law. According to the Appellants, the said order did not lay down any general or binding proposition of law authorising the statutory appellate authority to condone delays beyond the period expressly stipulated under Section 107(4) of the Act. It is contended that the extraordinary jurisdiction vested in a constitutional court enables it, in an appropriate case, to mould relief or relax the rigour of a statutory limitation in the interests of justice; however, an appellate authority constituted under the statute is a creature of the statute and must necessarily confine the exercise of its jurisdiction within the four corners thereof. 9.1 In support of the aforesaid proposition, reliance has been placed upon the judgment of the Hon'ble High Court of Delhi in M/s. Addichem Speciality LLP v. Special Commissioner-I, Department of Trade and Taxes, particularly paragraphs 69 and 70 thereof. Reliance has also been placed upon the judgment of the Hon'ble Supre....
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....mitted, would amount to an impermissible assumption of jurisdiction and would render the statutory limitation contained in Section 107(4) otiose. 11.0 The Appellants submit that the Respondents did not avail themselves of the remedies available under the Act by approaching the competent authorities in accordance with the procedure prescribed therein. In particular, no application was filed before the concerned authority seeking appropriate relief against the cancellation of registration. Instead, the Respondents directly invoked the appellate jurisdiction of the First Appellate Authority. 11.1 The appeals, however, were instituted after the expiry of the period prescribed under Section 107(1) of the CGST Act and beyond the further period of one month contemplated under Section 107(4), within which alone the delay could be condoned by the First Appellate Authority. In other words, the appeals were filed beyond the outer statutory limit of four months from the respective dates of cancellation of registration. Once the said period had expired, the First Appellate Authority was denuded of jurisdiction to entertain the appeals or to condone the delay. The appeals were, therefore, ....
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....eferred by the Department was vehemently opposed by the learned counsels Shri. Sumanth Chanda & Ms. Anu Vishwanathan appearing for M/s. Msrtech Research Labs Private Limited. It was submitted that the adjudicating authority had cancelled the registration without assigning any reasons, in gross violation of the principles of natural justice. It was further contended that the registration had been cancelled with retrospective effect, thereby jeopardising the genuine transactions undertaken by the Respondent. Learned counsel submitted that such retrospective cancellation had severely prejudiced the business of M/s. Msrtech Research Labs Private Limited, including the loss of legitimate business orders. 14.1 The learned counsel Shri. C. Sumanth further submitted that the Respondent had made every bona fide effort to file an application seeking revocation of the cancellation of its registration; however, owing to the lapse of the prescribed period, the application could not be filed. Consequently, the Respondent was constrained to prefer an appeal under Section 107 of the Act, assailing the order passed by the adjudicating authority. 14.2 It was contended that the delay in preferr....
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...., and specifically invited attention to paragraph 7 thereof. Further reliance was placed upon the judgment of the Hon'ble Supreme Court in G.T.C. Industries Limited v. Collector of Central Excise, reported in 2023 (384) ELT 239 (SC), with particular reference to paragraph 27 of the said judgment. 14.8 The learned counsel submitted that, having revoked the cancellation of the Respondents' registrations pursuant to the impugned orders, the Department has acted upon and, thereby, tacitly accepted the orders passed by the First Appellate Authority. It was further submitted that, following such restoration, the Respondents resumed and undertook commercial transactions in the ordinary course of business. 14.9 The learned counsel contended that the Department, having accepted the benefits and consequences flowing from such compliance and having treated the registrations as restored for all practical purposes, cannot now contend that the entire subsequent sequence of events should be disregarded while adjudicating the present appeals. In support of this submission, reliance was placed upon the judgment of the Hon'ble Supreme Court in Union of India v. Dharampal Satyapal, reported in ....
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....ourt in Shailaja Chandrasekar v. Additional Commissioner of Central Tax (Appeals), reported in 2023 (69) GSTL 11 (Karnataka HC), and drew our attention to paragraph 6 of the said judgment. 14.15 Insofar as the issue relating to condonation of delay is concerned, the learned counsel placed reliance upon the various decisions of the Hon'ble Telangana High Court, which have also been relied upon in the Respondents' cross-objections. The said decisions are as follows: a. Synergy Foods and Beverages v. Deputy State Tax Officer - 2025 (10) TMI 599 (Telangana High Court); b. A. Sridhar Works Contractor v. The Deputy State Tax Officer, Mahaboobnagar - 2026 (6) TMI 617 (Telangana HC); c. Anjaneya Kirana Merchants v. The Deputy State Tax Officer, Telangana - 2026 (4) TMI 1497 (Telangana HC); d. Tadikmala Prabhudas Contractor v. Deputy State Tax Officer - 2026 (4) TMI 1723 (Telangana HC); e. Blue Moon Transport v. The Deputy State Tax Officer, Telangana - 2026 (4) TMI 1421 (Telangana HC); and f. Sai Laxmi Traders v. The Deputy State Tax Officer, Telangana - 2026 (8) TMI 776 (Telangana HC). 14.16 The learned counsel further drew our a....
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.... constitutional court. In support of the said proposition, reliance was placed upon the decision of the Hon'ble Supreme Court in State of A.P. v. Commercial Tax Officer, reported in 1988 (68) STC 177 (A.P. HC), wherein reliance was placed upon the Constitution Bench judgment of the Hon'ble Supreme Court in East India Commercial Co., Ltd. v. Collector of Customs, reported in AIR 1962 SC 1893. It was submitted that the constitutional principle enunciated in the aforesaid decisions is that the law declared by the highest court within the territorial jurisdiction is binding upon the authorities and tribunals functioning thereunder or within its supervisory jurisdiction. Such authorities are not at liberty to disregard, dilute, or selectively apply the law so declared, whether while initiating proceedings or while adjudicating upon them. The Respondents submitted that the FAA was, therefore, bound to give effect to the legal position emerging from the decisions of the jurisdictional High Court. Any subsequent challenge to the impugned orders, without demonstrating that the FAA had departed from the binding ratio of those decisions, was contended to be legally untenable. Reliance was als....
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....e constitution of a Special Bench by the Principal Bench for adjudicating matters concerning the maintainability of appeals filed before the First Appellate Authority under Section 107 of the Act after expiry of the outer time limit prescribed under Section 107(4) thereof. 16.1 During the course of hearing, learned counsel sought one week's time to place additional submissions on record. However, upon further consideration of the proceedings, he withdrew the said request and stated that he would adopt the submissions advanced by the other Respondents. His principal submission was that the registrations of the concerned Respondents had already been restored and that they had continued to carry on their businesses thereafter. 16.2 In view of the withdrawal of the request for adjournment and the learned counsel's statement that he would adopt the submissions advanced in the connected matters, the Bench considered it appropriate to club these matters with the batch and dispose of them by a common order. 17.0 Before proceeding to examine the principal controversy arising in the present batch of appeals, we deem it appropriate to deal, at the threshold, with the request advanced....
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....ity has already rendered a decision on the applications for condonation of delay. The legality, propriety and jurisdictional competence of that decision alone fall for consideration in these departmental appeals. The matters do not involve an appeal by a taxpayer against the rejection of an application for condonation of delay, nor do they present the same controversy in the same procedural form as the matters proposed to be considered by the Special Bench. 17.5 It is, therefore, not possible to accept the submission that the present appeals ought necessarily to be deferred merely because a Special Bench is seized of matters raising a broadly connected question. The mere existence of an overlapping question of law cannot, by itself, operate as a bar to the hearing of proceedings which have been duly instituted and are otherwise ripe for adjudication. Each matter must be examined in the context of the order under challenge, the pleadings of the parties, and the precise relief sought therein. 17.6 We are also mindful of the fact that the appeals in the present batch have been pending consideration and arise from orders which have already been acted upon in several cases. Keepin....
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....y the provisions of Section 107 of the CGST Act, and the limits prescribed therein are mandatory in nature. 18.3 The orders relied upon by the First Appellate Authority were rendered by the Hon'ble High Court in exercise of its constitutional jurisdiction under Article 226 and were founded upon the facts and circumstances peculiar to those proceedings. Those decisions cannot be construed as laying down that the First Appellate Authority possesses an inherent or plenary power to condone delay beyond the outer limit expressly prescribed under Section 107(4) of the Act. Nor can a direction issued by the High Court in exercise of its extraordinary jurisdiction be treated as enlarging the statutory jurisdiction of an appellate authority in proceedings before it. 18.4 The distinction between the jurisdiction of a constitutional court and that of a statutory authority is fundamental. While the former may, in an appropriate case, exercise equitable and discretionary powers to prevent failure of justice, the latter is bound by the mandate of the statute. Equity follows the law; it cannot supplant it. Likewise, aequitas sequitur legem, meaning "equity follows the law", cannot be invoke....
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....elangana). 19.1 A careful examination of the said decisions reveals that the Hon'ble High Court exercised its extraordinary jurisdiction under Article 226 of the Constitution and, having regard to the peculiar facts and circumstances of those cases, directed that the delay be condoned and the matters be considered on merits. The orders cannot be construed as laying down any general proposition of law enlarging the jurisdiction of the First Appellate Authority under Section 107(4) of the Act. Nor did the Hon'ble High Court interpret Section 107(4) in a manner conferring upon the statutory appellate authority a power to condone delay beyond the outer limit prescribed therein. 19.2 An order passed in the exercise of constitutional jurisdiction, founded upon the particular facts of the case, does not constitute a binding precedent for the proposition that a statutory authority may disregard an express legislative limitation. The ratio decidendi of a judgment must be distinguished from the relief moulded by a constitutional court in the peculiar circumstances before it. 19.3 The First Appellate Authority was required to remain within the confines of the jurisdiction conferred b....
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....rders and the restoration of the Respondents' registrations, the appeals do not warrant interference and are liable to be disposed of. 21.0 Be that as it may, notwithstanding the alleged illegality of the impugned orders, the Department, in its considered discretion, implemented those orders by restoring the registrations of the Respondents. Consequent upon such restoration, they have continued to carry on their legitimate business, and the learned Departmental Representative has fairly acknowledged that their registrations are presently active. 21.1 Having acted upon and implemented the impugned orders, the Department has, at this stage, sought to challenge their validity, thereby creating an anomalous and precarious situation. If these appeals were to be allowed, the restored registrations would once again become liable to cancellation, including with retrospective effect. Such a consequence would imperil the validity of the genuine transactions undertaken by the Respondents during the intervening period, through no fault attributable to them. It would also have serious implications for the genuine input tax credit availed by their recipients, equally without any default on....
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....udice the Respondents' statutory right to challenge the cancellation orders in appeal. 23.2 Accordingly, we are not persuaded by the Department's objection on this issue, and the same is rejected. 24.0 The learned counsel for the Respondents also contended that the cancellation proceedings were vitiated by a violation of the principles of natural justice, inasmuch as neither the Show Cause Notice nor the Order-in-Original set out the reasons or particulars forming the basis for cancellation of the registrations. 24.1 We find considerable merit in this contention. However, in view of the conclusions already reached and the subsequent developments in the matter, we are of the view that remanding the proceedings to the original authority would serve no practical purpose, either for the Department or for the Respondents. We, therefore, refrain from examining this issue conclusively and leave the question open for determination in an appropriate case. 25.0 We have duly considered the judicial decisions relied upon by the learned counsel for the Respondents. The principles laid down therein are relevant and applicable to the facts and circumstances of the present case, and ha....