Jagdamba Jewellers vs. Chief Commissioner Of State Tax

Held

The Court held that while the Appellate Authority is bound by the statutory limitation periods under Section 107 of the CGST/RGST Act, 2017, non-adjudication of the appeal on merits would cause grave injury and prejudice to the petitioner, considering the reasons for the delay were beyond their control. The Court agreed with the reasoning in several cited Division Bench judgments of the Rajasthan High Court and a judgment from the Punjab and Haryana High Court in Luxmi Traders v. Union Territory of Chandigarh and Ors. The Punjab and Haryana High Court's view was that service of a show cause notice (SCN) solely by uploading on the common portal is not sufficient unless receipt is acknowledged or a reply is filed. If an ex parte order is passed without acknowledgment, proceedings should be restored to the SCN stage. If an appeal is dismissed on limitation grounds after the order-in-original was served only via portal upload, the appeal should be restored and heard on merits. Accordingly, the Appellate Authority was directed to entertain the petitioner's appeal and adjudicate it on merits, provided the appeal is filed within 30 days of the instant order being uploaded.

Facts

The petitioner, Jagdamba Jewellers, sought a direction to condone a delay of 232 days in filing an appeal against an Order-in-Original dated 12.04.2022, passed by the Assistant Commissioner of State Tax. This original order had rejected the petitioner's application for retrospective cancellation of its GST registration from 01.07.2017. The appeal was filed on 30.03.2023, but the Appellate Authority dismissed it on 05.04.2023 due to the delay, stating it lacked the power to condone it. The petitioner contends the delay was unintentional, stemming from a lack of knowledge of the show cause notice dated 05.05.2021, which it claims was not served. The petitioner only became aware of the rejection order and show cause notice around 17.02.2023 when approached by a purchaser.

Key Issues

1. Whether the petitioner has shown sufficient cause for the delay of 232 days in filing the appeal against the Order-in-Original dated 12.04.2022, as contemplated under Section 107 of the CGST/RGST Act, 2017? Petitioner's Arguments: The petitioner argued that the delay was not intentional or deliberate but occurred because they were unaware of the show cause notice dated 05.05.2021, which rejected their application for GST registration cancellation. They believed their application filed on 22.02.2021 was being processed and did not regularly check the GST portal. They only learned of the rejection order and show cause notice on 17.02.2023, after which they acted diligently by filing the appeal. They relied on several Division Bench judgments of the Rajasthan High Court, including M/s M R Traders v. UOI and M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors., arguing that sufficient cause for delay beyond their control was demonstrated. Respondents' Arguments: The respondents contended that the impugned order was rightly passed and the appeal was barred by limitation. They asserted that the show cause notice was issued to the petitioner on the GST portal on 05.05.2021, prior to the passing of the impugned order dated 12.04.2022, and was also available on the department's portal.