2025(02)LCX0009
Addichem Speciallity LLP
Versus
Special Commissioner
W.P.(C) 14279/2024 decided on 07-02-2025
IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on : 16
December 2024
Judgment pronounced on : 07 February 2025
W.P.(C) 14279/2024 and CM APPL. 59773/2024 (Interim Relief)
M/S ADDICHEM SPECIALLITY LLP
.....Petitioner
Through: Mr. Rupak
Srivastava and Mr.
Deepak Kapoor, Advs.
versus
SPECIAL COMMISSIONER I,
DEPARTMENT OF TRADE
AND TAXES AND ANR
.....Respondents
Through:
Mr. Udit Malik, ASC for
GNCTD with Mr. Vishal
Chanda and Ms. Rima Rao,
Advs.
W.P.(C) 15045/2024
JM FLEET MANAGEMENT PVT LTD
…..Petitioner
Through: Mr. Vibhas Kumar Jha,
Mr.
Rajat Pandey and Ms. Manju
Pandey, Advs.
versus
THE COMMISSIONER OF SGST DELHI,
DEPARTMENT
OF TRADE AND TAXES & ORS.
…..Respondents
Through: Mr. Rajeev Aggarwal,
ASC
with Mr. Shubham Goel, Mr.
Mayank Kamra and Mr. Ankit
Kumar, Advs, for R-1 to 3.
W.P.(C) 16861/2024
ENIA ARCHITECHTS
…..Petitioner
Through:
Mr. Vijay Gupta, Mr. Rahul
Gupta and Mr. Ajesh Kugan M,
Advs.
versus
COMMISSIONER OF CENTRAL GOODS AND
SERVICES
TAX AND ORS
…..Respondents
Through: Mr. Aakarsh Srivastava,
SC and
Mr. Anand Pandey, Adv.
W.P.(C) 5650/2024
ADITYA MADAAN
…..Petitioner
Through:
Mr. A.K. Babbar and Mr. B.K.
Tripathi, Advs.
versus
COMMISSIONER CGST GST
COMMISSIONERATE DELHI
& ORS.
…..Respondents
Through:
Mr. Aakarsh Srivastava, SC and
Mr. Anand Pandey, Adv.
W.P.(C) 13592/2024 and CM APPL. 56857/2024 (Stay)
JP POLYMERS
…..Petitioner
Through:
Mr. Anuj Saini and Mr. M.
Subhramaniyam, Advs.
versus
COMMISSIONER OF GST, DEPARTMENT
OF TRADE
AND TAXES AND ANR.
…..Respondents
Through:
Mr. Rajeev Aggarwal, ASC
with Mr. Shubham Goel, Mr.
Mayank Kamra and Mr. Ankit
Kumar, Advs. For R-1 and 2.
W.P.(C) 15725/2024
MS GANGA BOX FACTORY THROUGH ITS
PROPRIETOR ANAND RATHORE
.....Petitioner
Through: Mr. Karan Singh, Mr.
Rohit
Aggarwal, Mr. Paras Sharma,
Mr. Harinder, Advs.
versus
UNION OF INDIA THROUGH SECRETARY
REVENUE
CENTRAL BOARD OF INDIRECT TAXES
& ANR.
…..Respondents
Through: Mr. Raghuvendra Shukla, SPC
with Mr. Anil Devlal, Advs.
For UOI.
Mr. Anurag Ojha, SSC with
Mr. Dipak Raj, Mr. Subham
Kumar and Mr. Kuldeep
Mishra, Advs.
Mr. Rajeev Aggarwal, ASC
with Mr. Shubham Goel, Mr.
Mayank Kamra and Mr. Ankit
Kumar, Advs.
W.P.(C) 13679/2024
M/S DELHI ENTERPRISES
…..Petitioner
Through:
Mr. Vibhas Kumar Jha, Mr.
Rajat Pandey & Ms. Manju
Pandey, Advs.
versus
THE COMMISSIONER OF SGST DELHI &
ORS.
…..Respondents
Through:
Mr. Rajeev Aggarwal, ASC
with Mr. Shubham Goel, Mr.
Mayank Kamra and Mr. Ankit
Kumar, Advs. for R-1 to 3.
Mr. Rajat Pandey, Mr. Vibhas
Kumar Jha and Ms. Manju
Pandey, Advs.
W.P.(C) 13757/2024
LOOMAGE INDIA THROUGH ITS
PROPIETOR
…..Petitioner
Through: Mr. Abhay Chitravanshi,
Ms.
Aakriti Singh, Ms. Taniya
Malhotra and Ms. Grisha
Sharma, Advs.
versus
GOVT OF NCT DELHI & ANR.
…..Respondents
Through: Mr. Rajeev Aggarwal, ASC
with Mr. Shubham Goel, Mr.
Mayank Kamra and Mr. Ankit
Kumar, Advs. For R-1 and 2.
W.P.(C) 13760/2024
BHARAT AGRO INDUSTRIES
…..Petitioner
Through:
Mr. Khursheed Ahmad, M.
Kamil, Mr. Sameed Salim and
Mr. Pawan Kumar Sharma,
Advs.
versus
COMMISSIONER OF CGST, DELHI
AND OTHERS
…..Respondents
Through:
Ms. Anushree Narain, SSC with
Mr. Ankit Kumar, Adv.
Mr. Shashank Sharma, Adv.
W.P.(C) 16038/2024
M/S PC QUALITY FURNITURE
…..Petitioner
Through: Mr. Sermon Rawat and
Mr.
Harshit Jain, Advs.
versus
THE COMMISSIONER OF SGST DELHI
& ORS.
……Respondents
Through: Ms. Mehak Nakra, ASC
with
Ms. Gunjan Suyal and Mr.
Aditya Goyal, Advs.
W.P.(C) 16067/2024
M/S JAI AMBY FURNITURE
…..Petitioner
Through:
Mr. Sermon Rawat and Mr.
Harshit Jain, Advs.
versus
THE COMMISSIONER OF SGST DELHI &
ORS.
……Respondents
Through: Ms. Mehak Nakra, ASC
with
Ms. Gunjan Suyal and Mr.
Aditya Goyal, Advs.
W.P.(C) 16936/2024
M/S VASS IMPEX
…..Petitioner
Through: Mr. Vibhas Kumar Jha, Mr.
Rajat Pandey, Mr. Manju
Pandey and Mr. Deepak Jha,
Advs.
versus
THE JOINT COMMISIONER CGST
APPEALS-II DELHI
AND ANR.
…..Respondents
Through: Mr. Aakarsh Srivastava, SC
with Mr. Anand Pandey, Adv.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE DHARMESH SHARMA
JUDGMENT
DHARMESH SHARMA, J.
1. These batch of petitions emanate from the orders handed down by the Appellate
Authority, wherein the Appellate Authority has negated the stand of the
petitioners thereby dismissing their appeals on the ground of limitation as per
Section 107 of the Central and Goods Services Tax Act, 2017. The petitioners
also seek the quashing of the Show Cause Notices issued to them by the
respondents and the restoration of their respective GST registrations.
2. The main two issues of the petitioners herein are: -
i) Whether the Appellate Authority under Section 107 (4) of the CGST Act is authorized to condone the delay in filing an appeal beyond one month after the expiration of the three-month period specified in Sub-section (1) of Section 107 for filing an appeal against a decision or order issued by an adjudicating authority under the CGST Act? and
ii) Whether the appellate authority is empowered to condone a delay beyond the thirty-day period prescribed under Sub-section (4) of Section 107 of the Act of 2017 or not, this Court, in exercising its extraordinary jurisdiction under Article 226 of the Constitution of India, may direct the condonation of such delay. This can be done if the Court is satisfied that an exceptional case has been made out for such condonation or if the interest of justice demands it.
3. The petitioners in the
aforementioned petitions are registered proprietors/dealers under the CGST Act,
each holding different registration numbers. They were assessed by the
respective adjudicating authorities which resulted in certain demands being
raised against them and in some instances, their GST registrations being
cancelled. Aggrieved by the cancellation of their GST registrations and the
demands imposed, the petitioners filed statutory appeals before the Appellate
Authority under Section 107 of the CGST. However, those appeals were not
entertained and were dismissed due to delay in filing.
4. As the Central Government is yet to institute an Appellate Tribunal, the
petitioners, aggrieved by the rejection of their appeals, have approached this
Court by invoking its writ jurisdiction. For the sake of convenience and for
proper adjudication, each of the writ petitions will be discussed individually.
W.P. (C) 14279/2024
5. In the present writ petition, a SCN, bearing reference No. ZA070322183368F,
was issued by respondent No. 2 on 31.03.2022, proposing the cancellation of the
petitioner firm's GST registration on the ground of “non-commencement of
business within six months from the date of registration,” in the case of
voluntary registration. The petitioner firm submitted a reply to the notice on
03.10.2022, providing explanations for the alleged discrepancies and furnishing
the necessary documentation to demonstrate compliance with the GST provisions.
Despite this, respondent No. 2 proceeded to cancel the petitioner firm's GST
registration on 27.10.2022, with effect from the original date of registration,
i.e., 07.06.2018.
6. Feeling aggrieved by the order cancelling the GST registration, the
petitioner filed an appeal before the Appellate Authority under Section 107 of
the CGST Act on 12.02.2024. However, by order dated 29.07.2024, the appeal was
dismissed in limine, on the ground that the impugned order was of 27.10.2022 and
the appeal was filed on 12.02.2024, which is beyond the prescribed time limit
set forth in the provisions of sub-sections (1) and (4) of Section 107 of the
CGST Act.
7. The petitioner contends that the delay in filing the appeal was due to the
fact that they had submitted their reply to the SCN, which was duly received by
respondent No. 2 on 03.10.2022. Despite this, the cancellation order issued by
respondent No. 2 erroneously stated, “whereas no reply to notice to show
cause has been submitted.” The petitioner asserts that they made several
visits to the respondent to rectify this clerical mistake, which caused the
delay in filing the appeal.
W.P.(C) 15045/2024
8. In the present writ petition, the petitioner firm registered its business
under the CGST Act on 23.04.2019, with GST registration No. 07AAECJ4719NIZ6. The
petitioner firm asserts that due to the demise of a family member of their
Chartered Accountant from COVID-19 and the nationwide lockdown, they were unable
to file GST returns from February 2022 to June 2022.
9. On 26.07.2022, respondent No. 3 issued a SCN bearing reference No.
ZA070221010429 to the petitioner firm for failure to pay tax, interest and
penalty owed to the GST department. The petitioner firm approached respondent
No. 3 seeking restoration of the GST registration. However, respondent No. 3 did
not address the petitioner firm's request nor did they provide an opportunity
for the petitioner to submit a reply or request a personal hearing in response
to the SCN dated 26.07.2022. Subsequently, on 23.03.2023, respondent No. 3
issued an online order cancelling the petitioner firm's GST registration,
effective retrospectively from 24.04.2019. The petitioner firm further argues
that the Ward Office took eight months to issue the cancellation order.
10. On 25.01.2024, following consultation with their legal team and Chartered
Accountant, the petitioner filed an appeal before the Appellate Authority.
However, the appeal was dismissed in limine by the Appellate Authority on the
ground that the impugned order was of 23.03.2023 and the appeal was filed on
25.01.2024, which is beyond the prescribed time limit set forth in the
provisions of Sub-sections (1) and (4) of Section 107 of the CGST Act.
11. The petitioner relies on a decision of the Division Bench of this Court in
M/s Elasto Rubber Pvt. Ltd v. The Commissioner of SGST Delhi, wherein
this Court quashed the cancellation of GST registration. The petitioner states
that they have undertaken to settle any tax liabilities accrued or due for the
business year 2020 to the present or any charges payable to the respondents.
12. The petitioner further submits that if the respondents retroactively cancel
the GST registration effective 23.04.2019, it would invalidate the GST invoices
issued during that period and affect the transactions made under that GST
number. Consequently, GST officers have been issuing demand notices to
purchasers who received GST tax invoices from the petitioner for transactions
between 2019 and 2020. The petitioner argues that this is unlawful and
unsustainable in law, asserting that the respondents cannot retroactively cancel
the firm’s registration from 23.04.2019.
W.P.(C) 16861/2024
13. In the present writ petition, the petitioner firm had migrated to the CGST
Act, holding GSTIN No. 07AAEFE9144R1ZS. The petitioner states that respondent
No. 2 issued a SCN bearing reference No. ZA071120010986U for the
cancellation of its GST registration on 05.11.2020. The SCN specified that the
petitioner firm could submit a reply within eight working days from the date of
the notice. Additionally, the petitioner firm was instructed to appear for a
personal hearing on the same day, 05.11.2020, at 4:42 PM, failing which the case
would be decided ex-parte based on the available records and on merits. The SCN
was accompanied by an internal communication letter from the Deputy
Commissioner, Anti Evasion, Central Tax, to the Assistant Commissioner, Division
Rajouri Garden, CGST Delhi – West. The letter indicated that the Anti Evasion
branch had conducted a physical verification of the petitioner firm’s registered
premises pursuant to a directive dated 14.10.2020, and found the petitioner to
be non-existent at the specified location.
14. The impugned letter neither specified the date of physical verification nor
include evidence proving the petitioner’s non-existence at the principal place
of business, only mentioning a telephonic conversation with a former employee.
The Assistant Commissioner was requested to initiate suo motu cancellation
proceedings under the CGST Act. No inspection notice or verification report with
photographs was uploaded in Form GST REG-30, as per Rule 25 of the GST Rules,
2017, before 04.08.2023. On 5.11.2020, the petitioner firm’s manager informed
respondent No. 2 that the firm had vacated its premises due to COVID-19 and was
seeking a new location to resume operations.
15. The petitioner firm submitted a reply to the SCN on 16.11.2020, explaining
that the business premises were vacated due to the sudden COVID-19 outbreak with
the partners working from home. The petitioner firm also mentioned an ongoing
investigation by the Assistant Commissioner, GST Audit-II, Delhi, regarding the
migration of service tax input of Rs. 21,51,962/- through TRANS-1 Form. The
detailed reply aimed to substantiate that the petitioner firm was not a
non-existent or bogus dealer but had temporarily vacated the premises due to the
pandemic.
16. Respondent No. 2 uploaded the GST registration cancellation order on
26.11.2020. The petitioner contends that their reply was not considered as the
cancellation stated “no response has been submitted, and the registration is
canceled per DC (AE)'s direction.” The petitioner firm further explains that due
to the COVID-19 outbreak, the firm's accountant relocated to his hometown with
the GST portal login credentials leaving the partners unaware of the
cancellation order. On 17.12.2020, the partner submitted another reply with the
firm's new address, but they remained unaware of the cancellation order dated
26.11.2020.
17. The petitioner firm places reliance on the judgement of the Apex Court in
Commissioner of Central Excise, Bangalore v. Brindavan Beverages ,
wherein it was held that the SCN serves as the foundation upon which the
department must construct its case. If the allegations outlined in the show
cause notice are vague, lack specificity, are devoid of necessary details, or
are unintelligible, it can be conclusively held that the petitioner was not
afforded a proper opportunity to address the allegations contained therein. The
purpose of a SCN is to provide the noticee with a fair opportunity to respond to
the allegations made against them. In the absence of specific particulars, the
SCN fails to fulfill its intended purpose and becomes ineffectual. It is a
well-settled principle of law that any person against whom an adverse order is
proposed must be adequately informed of the reasons underpinning such a
proposal.
18. The petitioner firm discovered that their GST registration had been
cancelled effective 26.11.2020, vide cancelation order dated 26.11.2020. The
petitioner firm promptly filed an appeal before the Appellate Authority on
21.12.2023. However, on 19.04.2024, the appeal was dismissed solely on the
ground of limitation. The petitioner argues that the Appellate Authority
overlooked the vagueness of the show cause notice, the disregard of the
petitioner’s reply and that the cancellation order was issued hastily and under
the influence of another officer.
19. The petitioner firm submits that it seeks an opportunity to revive its GST
registration to regularize the defaults. Reliance is placed on the judgment of
the Madras High Court in Tvl. Suguna Cutpiece Center v. The Appellate Deputy
Commissioner, where it was held that cancellation of GST registration serves
no useful purpose and contravenes the objectives of the GST regime. The Court
observed that excluding taxpayers from the GST framework leads to revenue
leakage and undermines the purpose of ensuring proper tax collection on goods
and services. Denying the revival of registration effectively isolates
entrepreneurs and hinders revenue generation. Therefore, the impugned Show Cause
Notice and cancellation order merit being set aside, and the Petitioner's GST
registration should be restored.
W.P.(C) 5650/2024
20. In this instant writ petition, the petitioner got his company registered on
17.07.2017, bearing GSTIN No. 07DFFPM214D1ZR. The petitioner filed an
application for the cancellation of his registration on 09.03.2022. The
respondent No. 2 issued a SCN under Section 29 (2) of the CGST Act read with
Rules 22 (1) on 03.02.2023, for cancelation of registration of the petitioner’s
GST certificate.
21. The petitioner asserts that the SCN bears a stamp reading “Signature Not
Verified,” digitally signed by DS Goods and Services Tax Network 07, who is not
the authorized Proper Officer for the petitioner, rendering the notice legally
invalid. Additionally, the SCN dated 03.02.2023 does not indicate that the
registration would be cancelled retrospectively, yet the Registration
Certificate was cancelled retrospectively based on this notice. The petitioner
further states that the order dated 18.04.2023, cancelling the registration
retrospectively to 02.07.2017, also bears the “Signature Not Verified” stamp and
is digitally signed by an unauthorized officer, making it unsigned and invalid
in law.
22. The petitioner submits that the SCN dated 03.02.2023, reflected the reason
for cancellation of the Registration Certificate, which reads as follows: -
“Failures to furnish returns for a continuous period of six months” in facts and circumstances is not an erroneous reason when six months period has not exhausted.”
23. The petitioner submits that
this reason does not suffice as he had applied for the cancellation of the
Registration Certificate on 09.03.2022.
24. It is further stated that the order dated 18.04.2023 directed the petitioner
to pay “ZERO” (0) amount, contradicting the SCN dated 03.02.2023, which alleged
failure to pay tax, interest, or penalty beyond six months from the due date.
The cancellation order dated 18.04.2023, based on the SCN dated 03.02.2023, is
illegal, arbitrary, and invalid, as the cited reason is incorrect. The SCN was
issued before the six-month period had expired, and the petitioner had already
applied for cancellation, which was still pending. Therefore, the order violates
Section 29 (2) of the CGST Act, rendering it legally flawed.
25. Aggrieved by the cancellation of the Registration Certificate, the
petitioner filed an appeal before the Appellate Authority on 18.10.2023, which
was rejected on 09.01.2024 for being time-barred.
26. The petitioner contends that the Registration Certificate [RC] was suspended
on the same day the Show SCN dated 03.02.2023 was issued, and no order revoking
the suspension was passed within a reasonable time. Instead, the impugned
cancellation order was arbitrarily issued after a prolonged period on
18.04.2023. The cancellation, citing non-filing of returns for a continuous
period of six months, lacks statutory backing as it does not fall within the
causes outlined in Section 29 (2) of the CGST Act. Furthermore, the
retrospective cancellation of the RC, without prior notice or explicit mention
in the SCN, is unlawful and exceeds the authority conferred by law. Reliance is
placed on the judgment of this Court in Aditya Polymers vs. Commissioner,
DGST, which underscores the illegality of retrospective cancellation without
due process. Accordingly, the impugned order should be quashed as it violates
principles of natural justice and statutory provisions.
W.P.(C) 13592/2024
27. The petitioner firm, registered under the CGST Act with GSTIN
07ADGPJ9077M1ZW, states that it received various items from registered
suppliers, including M/s Ridhi Sidhi Polymers, M/s Pansari Steel Pvt. Ltd., and
M/s SSS Profound Solution Private Limited, with payments made through bank
transfers. The petitioner firm filed its annual return in GSTR-09 and availed
Input Tax Credit on items received from these suppliers. It is however stated
that since 2020, the proprietor of the petitioner firm has suffered from lower
spine pain and significant business losses due to non-receipt of dues from
various business parties.
28. In 2022, finding it difficult to continue the business, the proprietor of
the petitioner firm decided to close it and requested the respondents to permit
the discontinuation. The petitioner firm's application for business closure was
registered with the respondent on 25.05.2022, and on 20.06.2022, the respondent
approved the closure. The petitioner firm states that, more than five years
after filing the annual return for FY 2017-18, respondent No. 2 issued a SCN
bearing reference No. ZD070923023779X dated 22.09.2023, alleging an outstanding
demand of Rs. 4,55,93,670/- (including interest upon the amount due and penalty)
related to the annual return for FY 2017-18.
29. The petitioner firm responded to the SCN, explaining that the excess tax
computed for FY 2017-18 had already been reversed in FY 2018-19. The petitioner
firm also informed the Proper Officer that M/s Ridhi Sidhi Polymers remained
active until 2022 and filed its tax returns up to February 2022. However,
respondent No. 2, the Proper Officer, disregarded the petitioner firm's reply
and, in the order dated 12.12.2023, concluded that the petitioner firm had not
correctly availed input tax credit on inward supplies due to discrepancies in
the reconciliation of turnover in GSTR-9, resulting in a tax demand of Rs.
3,88,352/- (CGST: Rs. 1,94,176/- and SGST: Rs 1,94,176/-) for FY 2017-18.
30. The petitioner firm on being aggrieved by the order dated 12.12.2023 passed
by the Proper Officer, preferred to file an appeal before the Adjudicating
Authority. However, the appeal could only be filed on 12.06.2024 before the
Appellate Authority, due to the closure of the business, and it took time to
gather the necessary documents, resulting in a 91-day delay in filing of the
appeal. Inadvertently, no separate application for condonation of delay was
submitted. The Appellate Authority listed the appeal, raising objections about
the delay, and dismissed it on the grounds of limitation without addressing the
merits, through an order dated 04.07.2024.
31. The petitioner states that the Appellate Authority dismissed the appeal
without considering the petitioner's submissions on the delay and without
addressing the merits. The petitioner further submits that the excess tax
computed by the respondents for FY 2017-18 had already been reversed in the
subsequent financial year, FY 2018-19.
W.P.(C) 15725/2024
32. In the present matter, the petitioner, registered under the CGST Act on
01.07.2017 with GSTIN No. 07ADRPR6107R1ZM, submits that on 03.03.2021, the
respondents issued a SCN for Cancellation of Registration in Form GST REG-17.
The SCN alleged that the petitioner collected tax but failed to pay it to the
Central/State Government within three months of the due date. It also stated
that the petitioner's registration stood suspended from 01.07.2017. On
12.03.2021, the Proper Officer passed an order cancelling the petitioner's GST
registration retrospectively from the registration date, 01.07.2017.
33. Aggrieved by the cancellation order dated 12.03.2021, the petitioner filed
an appeal before the Appellate Authority on 19.12.2023. The appeal was dismissed
on 27.03.2024 due to the delay in filing. The impugned order stated that the
cancellation order was issued on 12.03.2021, and the appeal was filed beyond the
prescribed time limit as per Sub-sections (1) and (4) of Section 107 of the CGST
Act.
34. The petitioner submits that the cancellation order dated 12.03.2021 by the
Proper Officer and the appellate order dated 27.03.2024 are erroneous,
arbitrary, and unlawful, both legally and morally, and should be set aside on
the following grounds: -
a) The petitioner argues that the retrospective cancellation of GST registration is untenable in this case. The petitioner had voluntarily applied for cancellation due to financial difficulties and discontinuance of business, which implies the winding up and closure of business premises. Therefore, retrospective cancellation is unjustified.
b) The cancellation order dated 12.03.2021, passed by the Proper Officer, should be set aside due to violations of Rules 20, 21A, and 23 (3) of the CGST Rules, 2017. According to Rule 20, the petitioner filed an application for cancellation of registration within 30 days of the event warranting cancellation, due to financial hardship. Additionally, Rule 21A states that upon filing the application, the registration is deemed suspended from the date of submission. However, in this case, the Proper Officer incorrectly suspended the GST registration from the date of the Show Cause Notice, i.e., 03.03.2021, which is legally flawed. As per Rule 22 (3) of the CGST Rules, 2017, the Proper Officer must issue an order within 30 days of the application for cancellation. The petitioner applied on 05.10.2020 and 15.12.2020, but the order was issued on 12.03.2021, exceeding the prescribed period, making it non-compliant with Rule 22 (3).
W.P. (C) 13679/2024
35. In the present writ petition, the petitioner firm registered its business on
13.03.2020, bearing GSTIN No. 07LLDPS5372LIZA. The petitioner firm asserts that
it has regularly filed GST returns for the financial years 2020-2021, 2021-2022,
2022-2023, and 2023-2024. However, due to confusion regarding the firm's
address, the concerned GST inspector could not locate the premises. The
petitioner firm explains that the business premises are situated in Village
Nangli Poona, Delhi, an unauthorized area referred to as Laldora land by the
Land Revenue Department. This area lacks clearly defined addresses, as property
owners often create their own addresses for renting out spaces for commercial
purposes such as godowns and shops. The land is subdivided from a large Khasra
No. 35 into smaller plots, each approximately 100 square yards, with addresses
assigned by the landowners by adding numbers like 1, 2, 3, etc., to the Khasra
number. Consequently, when the sales tax inspector visited the petitioner firm's
address, he was unable to locate the premises and reported to his superiors that
the petitioner's firm was not in existence at the time of inspection.
36. Respondent No. 3 issued an online SCN to the petitioner firm on 11.09.2023,
stating that the “firm could not be traced. Address appears to be
incomplete.” The petitioner contends that respondent No. 3 was aware of the
firm's existence but was unable to trace the address due to the fact that the
area lacks a proper address system. The address was self-assigned by the
property owners for commercial purposes, rather than being recorded in the
official land. The respondent No. 3 issued an online cancellation of the
petitioner's GST registration on 03.10.2023, with retrospective effect from
13.02.2020, the date of the petitioner's firm's registration.
37. The petitioner asserts that upon learning of the cancellation of the GST
registration, which was based on the incomplete address of the firm, it promptly
filed an online appeal before the Appellate Authority on 04.02.2024. However,
the Appellate Authority dismissed the petitioner's appeal on the grounds of
delay on 03.09.2024.
W.P.(C) 13757/2024
38. In the present matter, the petitioner, operating a proprietorship firm under
the name Loomage India, is engaged in the manufacturing and supply of floor
coverings, rugs, carpets, mats, home furnishing textiles, handicrafts, and
similar products. The petitioner is a registered trader under the CGST Act since
01.07.2017, bearing GSTIN No. 07ACCPC7326DIZ4. The petitioner submits that,
being a layman with limited knowledge of GST return filing, he relies on
consultants for advice. It is averred that the petitioner, while filing his GST
returns, sought consultation from his advisor but was inadequately guided. The
petitioner further submits that on 22.01.2022, he applied for a refund of input
tax credit with the respondent for the period from 01.04.2020 to 30.11.2021, a
time span affected by the COVID-19 pandemic, during which he was unable to
consult with anyone adequately.
39. The petitioner submits that after filing the return, Respondent No. 2 issued
a SCN dated 04.04.2022, requiring the petitioner to “show cause as to why the
refund claim, to the extent of the specified amount, should not be rejected, or
the amount erroneously refunded should not be recovered for the reasons stated
therein.” In response, the petitioner filed a reply on 09.04.2022, attaching
all necessary documents as advised by his consultant. It is claimed that the
petitioner did not receive any subsequent communication regarding the acceptance
or rejection of the refund application and it was only after a significant
period that the petitioner, upon inquiring with his consultant, was
informed—after checking the GST portal—of the rejection of the refund claim.
40. The petitioner's application for input tax credit was rejected by Respondent
No. 2 through an order dated 29.04.2022, on the ground that the petitioner had
not uploaded GSTR-2A. The petitioner asserts that he was not informed by his
consultant about the specific documents required for submission with the return
filing. Due to his limited knowledge as a layman and the technical complexities
of the portal, he was unable to upload the GSTR-2A, and this was not due to any
other reason. The petitioner contends that he is capable of demonstrating his
entitlement to an input tax credit amounting to Rs. 6,59,829/-, which is a
substantial sum.
41. Aggrieved by the order dated 29.04.2022, wherein the respondent wrongfully
rejected the petitioner's refund application, the petitioner filed an appeal
under Section 107 of the CGST Act, 2017, on 23.01.2023. It is stated that the
petitioner did not initially inquire about the status of the refund application,
as he reasonably relied on communication from the respondents or any official
updates. It was only after specifically consulting with his advisor that the
petitioner became aware of the rejection order, nearly four months after its
issuance. Consequently, there was a significant delay in filing the appeal.
Furthermore, the petitioner did not engage any legal consultant after the
rejection of the refund application, resulting in a delay of 182 days in filing
the appeal.
42. The Appellate Authority, by orders dated 05.02.2024 and 14.02.2024, rejected
the appeal in limine on the ground that it was time-barred, as the petitioner
had filed the appeal beyond the three-month period permitted under Section 107
of the CGST Act, 2017. The petitioner contends that the Appellate Authority,
without proper consideration and by adopting a pedantic interpretation of
Section 107, rejected the appeal without appreciating that the refund
application was meritorious and that the petitioner was entitled to a full
refund of Rs. 6,59,829/-.
W.P.(C) 13760/2024
43. The petitioner, in the present writ petition, is a dealer registered under
the CGST Act, bearing GSTIN 07AJDPI6563N1ZS, with validity from 07.12.2019. The
petitioner was conducting business at the old principal place of business
located at “89, Ground Floor, Pkt-N, Sector-5, DSIDC City, Landmark Near CNG
Pump, Bawana, North, Delhi, Delhi, 110039” until 19.12.2022. Subsequently, the
petitioner shifted the business premises to a new address on 20.12.2022, as per
the rent agreement e-stamp certificate number IN-DL34164385356664U, and
requested an online amendment on 13.06.2023 via ARN AA0706230379524.
Consequently, the petitioner was found non-existent at the old business
premises.
44. Respondent No. 3 issued a SCN to the petitioner on 22.06.2023, citing the
reason as “Section 29 (2) (e) - registration obtained by means of fraud,
wilfull misstatement, or suppression of facts.” Subsequently, on 06.07.2023,
Respondent No. 3 passed an order for the cancellation of the Registration
Certificate with a “0” demand. However, the revenue, acting illegally and
arbitrarily, canceled the petitioner's GST registration with retrospective
effect from 20.12.2019.
45. Aggrieved by the original order dated 06.07.2023 (P-3), the petitioner filed
an appeal under Section 107 of the CGST Act before the Appellate Authority on
21.03.2024, accompanied by an application for condonation of delay in filing the
appeal beyond the prescribed three-month period. The appeal was filed following
the rejection of the application for condonation of delay in the revocation of
the cancellation of registration. After hearing the petitioner, the Appellate
Authority dismissed the appeal on 24.07.2024.
W.P.(C) 16038/2024 and W.P.(C) 16067/2024
46. The petitioner, in the present writ petition, registered its business under
the CGST Act, bearing GSTIN 07AYDPS2199H1Z1. The petitioner asserts that from
2017 to 2021, it conducted business in Delhi and regularly filed GST returns
during this period. For compliance under the CGST Act, the petitioner engaged a
GST consultant to prepare returns and provide advice on the required
compliances. However, during this period, the petitioner faced significant
operational challenges and financial stress due to the COVID-19 crisis and
successive lockdowns, which resulted in high operational costs and minimal
sales.
47. It is asserted that in light of these circumstances, the petitioner decided
to relocate its business operations to Baghpat, Uttar Pradesh. However, the
process of identifying a suitable location and completing the transition took
several months. Ultimately, the petitioner successfully shifted its operations
to Baghpat, U.P.
48. Respondent No. 3 issued a SCN on 23.10.2021 stating “Non-compliance of any
specified provisions in the GST Act or the Rules made thereunder as may be
prescribed.” However, the petitioner asserts that it was unaware of this SCN, as
it was not informed by its GST consultant, and consequently, the petitioner was
unable to participate in the proceedings. Subsequently, on 18.12.2021, the
respondents passed an order cancelling the petitioner’s GST registration
retrospectively with effect from 01.07.2017. In or around November 2023, the
petitioner learned from another GST consultant that it should have initiated the
revocation of its GSTIN for Delhi. Upon instructing the GST consultant to
undertake the necessary compliance measures, the petitioner was informed that
revocation of the Delhi GST registration was not possible, as the GST number had
been cancelled retrospectively from 01.07.2017.
49. Aggrieved by the order of cancelation dated 18.12.2021, the petitioner filed
an appeal before the Appellate Authority on 09.11.2023, wherein the appeal was
dismissed on 31.05.2024 on the ground of limitation.
W.P.(C) 16936/2024
50. The petitioner in the present writ, a trading firm registered under the CGST
Act with GST No. 07AFBPJ6962Q1ZT, was engaged in the business of trading goods,
including iron, steel, and scrap items, to various clients. The petitioner had
duly filed GST returns for the period from 2017 to August 2021. However, during
the COVID-19 pandemic, the petitioner’s business suffered significant losses due
to the economic downturn.
51. Additionally, it is claimed that several family members of the petitioner
became critically ill and passed away during this period, leaving the petitioner
emotionally distressed. As a result, the petitioner inadvertently failed to
respond to the SCN dated 09.08.2021 and did not take cognizance of the
subsequent cancellation of the GST registration through an order dated
19.08.2021.
52. Upon learning in September 2021 that the GST registration had been cancelled
by the Superintendent, the petitioner directed his accountant to visit the GST
office to initiate the restoration process. However, the Superintendent informed
them that the time to file a reply had lapsed and advised them to file an appeal
before the appellate authority for the restoration of the GST registration.
53. The petitioner submits that aggrieved by the cancellation of the GST
registration, the petitioner filed an appeal on 02.04.2024 before the Appellate
Authority, which was dismissed on 19.08.2021 on the grounds of limitation.
REPLY ON BEHALF OF THE RESPONDENTS [IN W.P.(C) 5650/2024
54. Per contra, the respondents contend that the petitioner has misrepresented
facts and failed to disclose that their application for cancellation of
registration was rejected due to non-compliance with a notice issued in that
regard. Despite the rejection, the petitioner resumed filing returns
temporarily, indicating an attempt to exploit legal provisions by withholding
complete information. The respondents assert that such conduct warrants
prosecution under Section 340 of the CrPC for perjury due to the filing of a
false affidavit. The sequence of events reveals that the petitioner filed an
application for cancellation of registration on 09.03.2022, following which a
notice dated 31.03.2022 was issued, seeking clarification regarding non-filing
of returns up to the date of cancellation.
55. The respondents submit that, as the petitioner failed to respond to the
notice within the stipulated time, i.e., by 08.04.2022, the application for
cancellation of registration was consequently rejected by order dated
09.05.2022. The respondents contend that the petitioner deliberately concealed
this order and omitted it from the narration of facts.
56. Following the rejection of the Application for Cancellation of Registration,
the petitioner resumed filing returns for the quarters of January-March 2022 on
23.04.2022 and April-June 2022 on 24.07.2022. However, the petitioner
subsequently ceased filing returns, failing to comply for a consecutive period
of six months, from July to December 2022. Consequently, the department issued
the SCN dated 03.02.2023 for the cancellation of registration. As no response
was received from the petitioner to the SCN, the department proceeded to pass
the order for cancellation of registration on 18.04.2023.
57. The respondents aver that after the rejection of the petitioner’s request
for cancellation of registration, the petitioner had a reasonable opportunity to
file an appeal against the said order within the prescribed time frame,
including the condonable period of three months plus one additional month.
However, the appeal was filed beyond this permissible limit, leading to its
rejection by the Appellate Authority. Furthermore, the petitioner had an
alternative and efficacious remedy available under the law by filing an
application for revocation of the cancelled registration, which, it appears, was
not exercised in this case. Reliance is placed on an order passed by the Apex
Court in Singh Enterprises v. Commissioner of Central Excise ; Garg
Enterprises v. State of U.P. ; and Asst. Commr. (CT), LTU, Kakinada v.
Glaxo Smith Kline Consumer Health Care Ltd..
ANALYSIS AND DECISION
58. Upon hearing learned counsels for parties and perusing the record, as well
as the case law cited at the Bar, we find at the outset that the present writ
petitions seeking an extension of the limitation period for filing an appeal
under Section 107 of the CGST Act cannot be sustained in law. The reasons are
not far to seek. Section 107 of the CGST Act provides as under:
“Section 107. Appeals to Appellate Authority.-
(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.
(2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.
(3) Where, in pursuance of an order under sub-section (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application.
(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.
(5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed.
(6) No appeal shall be filed under sub-section (1), unless the appellant has paid-(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, [subject to a maximum of [twenty] crore rupees], in relation to which the appeal has been filed.
[Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.](7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.
(8) The Appellate Authority shall give an opportunity to the appellant of being heard.
(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.
(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.
(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:
Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:
Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74 [or section 74A].
(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.
(13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:
Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.
(14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.
(15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.
(16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties.
59. A bare perusal of the
aforesaid provision reveals that an assessee aggrieved by an order passed by the
Adjudicating Authority may appeal to the Appellate Authority within three months
from the date on which the said decision or order is communicated to such
person. Sub-Section (4) of Section 107 of the CGST Act provides discretion to
the Appellate Authority to entertain an appeal if it is satisfied that the
appellant was prevented by sufficient cause from presenting the appeal within
the prescribed three-month period, provided the appeal is presented within an
additional period of one month.
60. It is well settled that once a statute prescribes a specific period of
limitation, the Appellate Authority does not inherently hold any power to
condone the delay in filing the appeal by invoking the provisions of Section 5
or 29 of the Limitation Act, 1963. Reference in this regard can be had to
decision in the cited case of Singh Enterprises (supra) wherein it
was observed as under:
“8. The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of statute are not vested with jurisdiction to condone the delay beyond the permissible period provided under the statute. The period up to which the prayer for condonation can be accepted is statutorily provided. It was submitted that the logic of Section 5 of the Limitation Act, 1963 (in short “the Limitation Act”) can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow it to be presented within a further period of 30 days. In other words, this clearly shows that the appeal has to be filed within 60 days but in terms of the proviso further 30 days’ time can be granted by the appellate authority to entertain the appeal. The proviso to Sub-section (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only up to 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days’ period.”
{Bold portion emphasized}
61. Similarly, in the decision of Garg Enterprises (supra) it was observed as under:
“7. The Central Goods and Services Act is a special statute and a self-contained code by itself. Section 107 of the Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite law that Section 5 of the Limitation Act, 1963 will apply only if it is extended to the special statute. Section 107 of the Act specifically provides for the limitation and in the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. Accordingly, one cannot apply Section 5 of the Limitation Act, 1963 to the aforesaid provision.
8. In light of the above, no interference is required in this petition and the same is, accordingly, dismissed.”{Bold portion emphasized}
62. Reliance can also be placed on a decision of the Supreme Court in the case of Commissioner of Customs and Central Excise v Hongo. This matter pertained to the unamended Section 36H (1) of the Central Excise Act, which provided for a reference to the High Court. The provision enabled the Commissioner of Central Excise or any other party to direct the Tribunal, within a period of 180 days from the date of service of notice of an order under Section 35C of the Central Excise Act, to refer to the High Court any question of law arising from such order of the Tribunal. The said provision neither extended the period of limitation for filing an application to the High Court beyond the prescribed period nor did it permit the condonation of the delay. In this context, it was held as follows:
“19. The said decision in Popular Construction Co. case [(2001) 8 SCC 470] arose under the Arbitration and Conciliation Act, 1996. The question which arose for consideration in that case was whether provisions of Section 5 of the Limitation Act, 1963 are applicable to an application challenging an award under Section 34 of the Arbitration and Conciliation Act, 1996. In that case, award was filed by the appellant Union of India in the Bombay High Court on 29-3-1999. The appellant filed an application challenging the award on 19-4-1999 under Section 30 read with Section 16 of the Arbitration Act, 1940. Subsequently, the application was amended by inserting the words “Arbitration and Conciliation Act, 1996” in place of “Arbitration Act, 1940”. The application was dismissed by the learned Single Judge on 26-10-1999 on the ground that it was barred by limitation under Section 34 of the 1996 Act. The Division Bench rejected the appeal and upheld the findings of the learned Single Judge. The said order was challenged in this Court.
20. Though learned counsel for the appellant relied on the said decision in support of his claim, on perusal of the same, we are unable to concur with him. In para 12, this Court held that: (Popular Construction Co. case [(2001) 8 SCC 470] , SCC pp. 474-75)“12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words used in the proviso to sub-section (3) are ‘but not thereafter’ and this phrase would amount to an express exclusion within the meaning of Section 29 (2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase ‘but not thereafter’ wholly otiose. No principle of interpretation would justify such a result.”
Ultimately, this Court dismissed the appeal filed by the Union of India and confirmed the order of the High Court holding that the application filed to set aside the award is barred by limitation.
63. It would also be pertinent to notice the decision of the Supreme Court in the case of Asst. Commr. (CT), LTU, Kakinada (supra), wherein it was observed as under:
“12. Indubitably, the powers of the High Court under Article 226 of the Constitution are wide, but certainly not wider than the plenary powers bestowed on this Court under Article 142 of the Constitution. Article 142 is a conglomeration and repository of the entire judicial powers under the Constitution, to do complete justice to the parties. Even while exercising that power, this Court is required to bear in mind the legislative intent and not to render the statutory provision otiose. In a recent decision of a three-Judge Bench of this Court in Oil and Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Limited & Ors. [2@O0L7) 5 SCC 42], the statutory appeal filed before this Court was barred by 71 days and the maximum time limit for condoning the delay in terms of Section 125 of the Electricity Act, 2003 was only 60 days. In other words, the appeal was presented beyond the condonable period of 60 days. As a result, this Court could not have condoned the delay of 71 days. Notably, while admitting the appeal, the Court had condoned the delay in filing the appeal. However, at the final hearing of the appeal, an objection regarding appeal being barred by limitation was allowed to be raised being a jurisdictional issue and while dealing with the said objection, the Court referred to the decisions in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur & Ors. [(2008) 3 SCC 70 = 2008 (221) E.L.T. 163 (S.C.)], Commissioner of Customs and Central Excise v. Hongo India Private Limited & Anr. [(2009) 5 SCC 791 = 2009 (236) E.L.T. 417 (S.C.)], Chhattisgarh State Electricity Board v. Central Electricity Regulatory Commission & Ors. [(2010) 5 SCC 23] and Suryachakra Power Corporation Limited v. Electricity Department represented by its Superintending Engineer, Port Blair & Ors. [(2016) 16 SCC 152] and concluded that Section 5 of the Limitation Act, 1963 cannot be invoked by the Court for maintaining an appeal beyond maximum prescribed period in Section 125 of the Electricity Act.
x x x x x19. Arguendo, reverting to the factual matrix of the present case, it is noticed that the respondent had asserted that it was not aware about the passing of assessment order dated 21-6-2017 although it is admitted that the same was served on the authorised representative of the respondent on 22-6-2017. The date on which the respondent became aware about the order is not expressly stated either in the application for condonation of delay filed before the appellate authority, the affidavit filed in support of the said application or for that matter, in the memo of writ petition. On the other hand, it is seen that the amount equivalent to 12.5% of the tax amount came to be deposited on 12-9-2017 for and on behalf of respondent, without filing an appeal and without any demur - after the expiry of statutory period of maximum 60 days, prescribed under Section 31 of the 2005 Act. Not only that, the respondent filed a formal application under Rule 60 of the 2005 Rules on 8-5-2018 and pursued the same in appeal, which was rejected on 17-8-2018. Furthermore, the appeal in question ne assessment order came to be filed only on 24-9-2018 without disclosing the date on which the respondent in fact became aware about the existence of the assessment order dated 21-6-2017. On the other hand, in the affidavit of Mr. Sreedhar Routh, Site Director of the respondent-company (filed in support of the application for condonation of delay before the appellate authority), it is stated that the company became aware about the irregularities committed by its erring official (Mr. P. Sriram Murthy) in the month of July, 2018, which pre-supposes that the respondent must have become aware about the assessment order, at least in July, 2018. In the same affidavit, it is asserted that the respondent-company was not aware about the assessment order, as it was not brought to its notice by the employee concerned due to his negligence. The respondent in the writ petition has averred that the appeal was rejected by the appellate authority on the ground that it had no power to condone the delay beyond 30 days, when in fact, the order examines the cause set out by the respondent and concludes that the same was unsubstantiated by the respondent. That finding has not been examined by the High Court in the impugned judgment and order at all, but the High Court was more impressed by the fact that the respondent was in a position to offer some explanation about the discrepancies in respect of the volume of turnover and that the respondent had already deposited 12.5% of the additional amount in terms of the previous order passed by it. That reason can have no bearing on the justification for non-filing of the appeal within the statutory period. Notably, the respondent had relied on the affidavit of the Site Director and no affidavit of the concerned employee (P. Sriram Murthy, Deputy Manager-Finance) or at least the other employee [Siddhant Belgaonker, Senior Manager (Finance)], who was associated with the erring employee during the relevant period, has been filed in support of the stand taken in the application for condonation of delay. Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non-compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24-9-2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all.
xxxxx
21. Taking any view of the matter, therefore, the High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold.”{Bold portion emphasized}
64. A careful reading of the
aforesaid decision would bring to the fore that the legislative intention to
provide a specific period of limitation, thereby excluding the general
applicability of the Limitation Act, 1963, must be respected. The Supreme Court
has observed that the plenary powers of the High Court cannot in any case exceed
the jurisdictional powers under Article 142 of the Constitution of India, 1950,
and even the Supreme Court cannot extend the period of limitation de hors the
provisions contained in any statutory enactment.
65. Section 107 (4) firstly prescribes a general time frame within which an
appeal may be preferred. Once that period has elapsed, it stipulates that the
appeal may be instituted within a further period of one month. The provision
thus prescribes an additional period of one month within which an appeal may be
instituted. That section however stops at that and does not allude to aspects
such as sufficient cause or other similar factors which may have prevailed and
led to the appeal not being lodged within the time prescribed. The provision
thus clearly excludes the general principles which the law recognises as
relevant for the purposes of condonation of delay. It is this facet of Section
107 (4) which appears to have weighed upon various High Courts to hold that the
said provision excludes the principles underlying Section 5 and other provisions
concerned with condonation contained in the Limitation Act. It is this facet
which triggers Section 29 of the Limitation Act and results in the exclusion of
the other provisions governing condonation contained in that statute.
66. At this juncture, it would be expedient to refer to few judgments of the
other High Courts on the subject. Reference can be invited to the decision of
the Chhattisgarh High Court in Nandan Steels & Power Ltd. v. State of
Chhattisgarh, wherein it was held that the statutory timeline for filing an
appeal under Section 107 (1) of the CGST Act is three months from the date the
decision or order is communicated to the appellant. However, Section 107 (4)
provides a limited extension of one additional month, at the discretion of the
appellate authority, if sufficient cause is demonstrated. The Court observed
that the Legislature, while allowing an extension in specific instances, did
not intend for the Limitation Act to apply to proceedings under the CGST Act. If
such an intention existed, there would have been no need to confer special
powers on the High Court to entertain appeals beyond the prescribed period,
subject to sufficient cause being shown. This distinction is crucial because,
unlike other legislations where Section 5 of the Limitation Act applies
automatically via Section 29 (2), the CGST Act prescribes a rigid timeframe.
Further, the absence of the phrase “but not thereafter” in Section 107 (4) does
not dilute its mandatory nature.
67. Likewise, the Allahabad High Court in Yadav Steels v. Commissioner
dealt with a matter wherein the appeal was filed 66 days after the expiry of the
additional one-month period, making it ineligible for condonation, decision of
the Appellate Authority that refused to entertain it in view of section 107 (4)
was upheld. Emphasizing the significance of the statutory limitations in tax
laws, particularly in the context of the CGST Act, it was also pointed out that
limitation provisions are crucial in ensuring the timely resolution of disputes,
promoting legal certainty, and facilitating efficient tax compliance. It was
held that given the complexity of tax laws and the potential for disputes
between taxpayers and authorities, such provisions establish a structured
framework that prevents undue delays and ensures fiscal stability. It was thus
observed that Section 107 of the CGST Act, being a self-contained provision,
prescribes a specific limitation period for filing appeals, reflecting the
legislative intent to expedite dispute resolution and by setting strict time
limits, the provision ensures that tax-related matters are adjudicated without
unnecessary delays, thereby enhancing administrative efficiency and revenue
certainty. It was held that Section 5 of the Limitation Act generally allows for
extensions in exceptional cases but its application is expressly excluded in
taxation statutes where specific timeframes are prescribed.
68. That being the legal position, we unhesitatingly find that the decision of
the Calcutta High Court in the case of Mukul Islam v. Assistant Commissioner
of Revenue wherein the Court overturned the order that had rejected the
appeal holding that the CGST law does not explicitly exclude the Limitation Act
as also the decision of the Andhra Pradesh High Court in Venkateshwara Rao
Kesanakurti v. State of AP , wherein it was held that Limitation Act is
applicable to condone the delay in filing the appeal beyond one month under the
CGST Act, cannot be of any assistance to the petitioners.
69. In summary, the power to condone delay caused in pursuing a statutory remedy
would always be dependent upon the statutory provision that governs. The right
to seek condonation of delay and invoke the discretionary power inhering in an
appellate authority would depend upon whether the statute creates a special and
independent regime with respect to limitation or leaves an avenue open for the
appellant to invoke the general provisions of the Limitation Act to seek
condonation of delay. The facility to seek condonation can be resorted provided
the legislation does not construct an independent regime with respect to an
appeal being preferred. Once it is found that the legislation incorporates a
provision which creates a special period of limitation and proscribes the same
being entertained after a terminal date, the general provisions of the
Limitation Act would cease to apply.
70. In view of the forgoing discussion, as it is evident that each of the
appeals was filed beyond the prescribed period of limitation provided by
Sections 107 (1) and 107 (4) of the CGST Act, the aforesaid writ petitions lack
merit and are accordingly dismissed.
71. The pending applications also stand disposed of.
YASHWANT VARMA, J.
DHARMESH SHARMA, J.
FEBRUARY 07, 2025