Aarcity Builders Private Limited vs. Union Of INDIA And Ors

Held

The Court held that the interpretation of Notification No. 34/2021 by the respondents was unduly restrictive. The Court reasoned that the notification was issued in view of the COVID-19 pandemic, during which even the Supreme Court had extended limitation periods. Given that the petitioners had already benefited from earlier notifications providing extensions, the time limit for filing their revocation applications should have been extended up to 30th September 2021. The Court found that the petitioners were entitled to the benefit of these extended timelines. The ratio decidendi is that notifications extending time limits due to pandemic-related difficulties should be interpreted liberally to provide relief to taxpayers facing procedural hurdles. The Court allowed the writ petitions and directed that if the petitioners filed their applications for revocation of cancellation within 30 days from the receipt of the certified copy of the order, such applications would be deemed to be within limitation and would be decided on merits.

Facts

The petitioners, various private limited companies and firms, filed writ petitions challenging the rejection or non-consideration of their applications for revocation of GST registration cancellation. The cancellations were primarily due to failure to file six monthly returns. The petitioners argued that subsequent notifications and orders issued by the government provided for extended timelines for filing such applications, especially in light of the COVID-19 pandemic. The respondents, including the Union of India and the State of Haryana, contended that the notifications, particularly Notification No. 34/2021 dated 29.08.2021, were applicable only to specific periods of cancellation orders and not to all cases where the time limit for revocation fell within the pandemic period. The cancellation orders in question were passed on dates prior to the periods specified in some of the notifications.

Key Issues

1. Whether the petitioners are entitled to the benefit of extended timelines for filing applications for revocation of GST registration cancellation, as provided by various notifications and orders issued by the government, considering the period of the COVID-19 pandemic? Petitioner's contention: The petitioners argued that a conjoint reading of notifications, including the Central Goods and Services Tax (Fifth Removal of Difficulties) Order 2019, a notification dated 25.06.2020, and Notification No. 34/2021 dated 29.08.2021, entitled them to file their applications for revocation of cancellation of registration up to 30th September 2021. They relied on the principle that these extensions were necessitated by the newness of the GST Act and the difficulties faced by taxpayers, further exacerbated by the pandemic, citing the Supreme Court's blanket order on limitation extensions. Respondents' contention: The respondents contended that Notification No. 34/2021 dated 29.08.2021 applied only to cases where the cancellation orders were passed between 01.03.2020 and 31.08.2020, and not to their cases where cancellation orders were passed earlier.