M/S Subha Kamala Chawal Udyog PVT. LTD. vs. The Union Of INDIA
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The petitioner, M/s Subha Kamala Chawal Udyog Pvt. Ltd., is challenging the cancellation of its GST registration, which occurred on 23.05.2019. An appeal against this cancellation was filed but was dismissed on 08.07.2022. The dismissal was primarily due to the appeal not being filed within the prescribed limitation period, including the extended period for condonation of delay under Section 107(4) of the Bihar Goods and Services Tax Act, 2017. The petitioner relied on a Government of India Notification No. 03/2023 dated 31st March 2023, issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs.
Held
The Court held that the benefit of Notification No. 03/2023 dated 31st March 2023 extends to the petitioner. The Court found no exclusion in the notification for cases where a person applied for revocation of cancellation, which was rejected, and an appeal therefrom was delayed under Section 107 of the Act. The reasoning was that the notification's purpose is to provide relief to defaulters, and this benefit should be available to those who availed the process but failed to file an appeal within the specified time under Section 107. Consequently, the Court set aside the appellate order (Annexure-5) and directed the petitioner to comply with the notification in its letter and spirit to avail its benefits. The writ petition was allowed.
Key Issues
1. Whether the benefit of Notification No. 03/2023 dated 31st March 2023 extends to a person whose appeal against an order of cancellation of registration was rejected on the grounds of delay under Section 107 of the Bihar Goods and Services Tax Act, 2017, even if the original application for revocation of cancellation was rejected for reasons other than solely failing to adhere to the time limit under Section 30(1)? Petitioner's Contention: The petitioner argued that Notification No. 03/2023, particularly its Explanation, should be interpreted to include cases where an appeal against the cancellation order was rejected due to delay, as the notification aims to provide relief to those who failed to comply with time limits. They relied on the Notification itself. Revenue's Contention: The State Counsel contended that the appeal was rejected for being not maintainable due to delay, and not specifically for failure to adhere to the time limit under Section 30(1) of the Act, implying a potential distinction in the application of the notification.
Sections Cited
Section 107, Section 30(1), Section 107(4)
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 10-04-2023 The petitioner is concerned with the cancellation of registration as brought on by Annexure-4 dated 23.05.2019. An appeal was filed which also stood dismissed by Annexure-5 dated 08.07.2022. The dismissal of the appeal was on account of the appeal having not been filed within the period of limitation and even the further period in which the appellate authority, as per Section 107(4) of the Bihar Goods and Services Tax Act, 2017, had power to condone the delay. The learned counsel for the petitioner relied on the 2/3 Notification bearing No.03/2023 dated 31st March, 2023 of the Government of India, Ministry of Finance, (Department of Revenue) Central Board of Indirect Taxes and Customs. The learned State Counsel, however, points out that in the present case, the appeal was rejected for the reason of it being not maintainable for reason of the delay and not due to failure of adherence to the time limit specified under Section 30(1) of the Act. We extract the Explanation to the Notification dated 31st March, 2023 hereinbelow:- “Explanation: For the purposes of this notification, the person who has failed to apply for revocation of cancellation of registration within the time period specified in section 30 of the said Act includes a person whose appeal against the order of cancellation of registration or the order rejecting application for revocation of cancellation of registration under section 107 of the said Act has been rejected on the ground of failure to adhere to the time limit specified under sub- section (1) of Section 30 of the Act.” The Notification makes applicable the benefit to persons who have failed to apply for revocation of the cancellation of registration within the time period prescribed in Section 30 of the said Act, if such cancellation was effected prior to 31.12.2022. As per the aforesaid Explanation, even in cases where an appeal filed against the rejection for reason of non-adherence to the time limit under Section 30(1) of the Act was enabled the benefit of the Notification. We do not find any exclusion insofar as a person having applied for revocation of cancellation, which was rejected and an appeal therefrom was delayed under Section 107 3/3 of the Act. The Notification does not exclude such cases. When a defaulter is enabled the benefit, we are of the opinion that such benefit should be available even to persons who availed the benefit but failed to file an appeal within the time specified under Section 107 of the Act. In such circumstances, we set aside the order under Appeal, Annexure-5 and direct the petitioner to comply with the Notification in its letter and spirit, upon which he will be enabled the benefit of the Notification. The writ petition stands allowed without any order as to costs.
Sujit/Aditya (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE Uploading Date 17.04.2023 Transmission Date
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.