M/S Rana Engineering Through Its Proprietor Sikandar Rana vs. Union Of INDIA Thr The Commissioner Ministry Of Finance Deptt Of Revenue CGST And Central Exicse
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M/s Rana Engineering, a proprietorship firm, is aggrieved by an order dated September 8, 2023, by the Additional Commissioner of Central Taxes (Appeals), which dismissed its appeal as not maintainable and barred by limitation. The petitioner's GST registration was cancelled on February 3, 2023, effective from January 31, 2023, due to non-filing of returns for over six months. A show-cause notice was issued on December 9, 2022. The petitioner filed an appeal under Section 107 of the GST Act on August 26, 2023. The appellate authority also held that the benefits under an Amnesty Scheme, operative until August 31, 2023, could not be extended as the cancellation order was passed after December 31, 2022. The petitioner did not avail opportunities under Section 30 or Section 45 for restoration of registration before filing the appeal.
Held
The Court held that the appeal filed by the petitioner under Section 107 of the GST Act on August 26, 2023, was within the extended period of seven months, as contemplated by sub-sections (3) and (4) of Section 107. Therefore, the appellate authority erred in rejecting the appeal on the ground of delay. The Court also opined that the appellate authority could have alternatively granted the petitioner an opportunity to approach the appropriate authority under Section 30 for revocation of the cancellation of registration, after paying applicable penalties, fines, and interest. The Court further noted that Section 14 of the Limitation Act, 1963, provides for the exclusion of time spent in prosecuting a matter in a wrong forum, and this benefit would be available to the petitioner as the application of the Limitation Act is not excluded in the GST Act. Consequently, the order dated September 8, 2023, was set aside. The petitioner was permitted to file an application under Section 30 within 30 days after completing all formalities, and this application was to be dealt with in accordance with law.
Key Issues
1. Whether the appeal filed by the petitioner under Section 107 of the GST Act, on August 26, 2023, against the cancellation order dated February 3, 2023, was barred by limitation, considering the provisions of Section 107(3) and (4) of the GST Act? 2. Whether the petitioner was entitled to the benefit of Section 14 of the Limitation Act, 1963, for exclusion of time spent in prosecuting the matter before a wrong forum? Petitioner's Arguments: The petitioner argued that the appeal filed on August 26, 2023, was within the permissible period of seven months, considering the extension clauses under Section 107(3) and (4) of the GST Act. They also contended that Section 14 of the Limitation Act, 1963, which is not excluded in the GST Act, should be applied to exclude the time spent in filing the appeal before the appellate authority. The petitioner referred to a registration advisory issued in November 2023, which provided a period of 270 days for filing a revocation application. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or state.
Sections Cited
Section 30, Section 39, Section 45, Section 107, Section 14
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IN THE HIGH COURT OF JHARKHAND AT RANCHI (Civil Writ Juri iction) WP(T) No. 6387 of 2023
M/s Rana Engineering, a proprietorship firm, having its principal place of business at Khata No. 304, Plot No. 995, Barhi, Hazaribagh, Jharkhand 825405 through its proprietor Sikandar Rana, age about 41 years, son of Gobardhan Rana, resident of Panja Bipara, PO and PS Barbil, District Kendujhar, Orissa 758035
...… Petitioner
Versus 1.Union of India, through the Commissioner, Government of India, Ministry of Finance, Department of Revenue, CGST and Central Excise Commissionerate, Ranchi having its office at Central Revenue Building 5A, Main Road, Ranchi, Jharkhand, PIN 834001, PO GPO and PS Kotwali 2.The Superintendent, Ministry of Finance, Department of Revenue, CGST and Central Excise Commissionerate, Range-1, Hazaribagh, having its office at Arya Nagar, near Muffassil Thana, NH-31, PO Muffassil, PS Hazaribagh, District Hazaribagh 825301
…. ... Respondents
CORAM: HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE ARUN KUMAR RAI
For the Petitioner : Mr. Shresth Gautam, Advocate For the Respondents : Mr. P.A.S. Pati, Advocate
23rd February 2024 Per, Shree Chandrashekhar, A.C.J.
Mr. Rana Engineering is aggrieved by dismissal of Appeal Case No. 126/CGST/RAN/2023 by an order dated 8th September 2023. In this order, the Additional Commissioner of Central Taxes (Appeals) has held the appeal not maintainable and barred by limitation. The appellate authority has also held that the benefits under the Amnesty Scheme which was operative till 31st August 2023 cannot be extended in case of the petitioner-firm as the cancellation order was passed after 31st December 2022. 2. The petitioner-firm which is registered under the Goods and Service Tax (in short, GST) law with registration no. GSTIN No. 20AMCPR4953K1ZY did not file returns for a continuous period of more than six months and therefore a show-cause notice was issued to it on 9th December 2022. Having found the explanation offered by the petitioner- firm not satisfactory, the GST registration of the petitioner-firm was cancelled by an order dated 3rd February 2023 to be effective from 31st
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January 2023. The petitioner-firm therefore filed an appeal under section 107 of the GST Act which, as noticed above, has been dismissed.
Section 39 of the GST Act provides that every registered person other than an input service distributor or a non-resident taxable person shall for every calendar month or part thereof furnish a return of inward and outward supply of goods and service. There are other requirements/ stipulations under section 39 which every registered person/firm is required to comply. Section 45 provides a window to the registered person/firm for restoration of the registration by allowing/furnishing of a final return within three months from the date of the cancellation or from the date of the order of cancellation whichever is later. Under section 30, any registered person whose registration is cancelled may apply for revocation of cancellation of the registration in the prescribed manner. Mr. Shresth Gautam, the learned counsel has referred to registration advisory which was issued in November 2023 under which the period of 270 days was provided for filing a revocation application. The petitioner-firm did not avail the opportunities under section 30 as also not under section 45 to apply for restoration of its registration and straightway rushed to the appellate authority by filing an appeal under section 107 of the GST Act.
A glance at the provisions under section 107 would reveal that in the conditions mentioned under sub-sections 3 and 4 the appellate authority may extend the period of three months by another three months and also by another one month. This is thus quite apparent that in appropriate cases an appeal under section 107 can be filed within a period of seven months. Therefore, having regard to the provisions under sub- sections 3 and 4 of section 107, the delay in filing the appeal by the petitioner-firm could have been extended by the appellate authority and the appeal filed on 26th August 2023 which was within seven months from the date of order of cancellation was maintainable and could not have been rejected on the ground of delay. Besides this aspect of the matter, we are of the opinion that the appellate authority could have alternatively granted opportunity to the petitioner-firm to approach the appropriate authority under section 30 for revocation of the cancellation of licence after paying the applicable penalty, fines, interest etc. Section 14 of the Limitation Act,
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1963 provides exclusion of time spent in prosecuting the matter in wrong forum. This is admitted at the bar that the application of the Limitation Act is not excluded in the GST Act and, therefore, the benefit under section 14 shall be available to the petitioner-firm, if necessary.
In the aforesaid circumstances, order dated 8th September 2023 is set aside and this writ petition is allowed to the extent that the petitioner- firm shall be permitted to file an application under section 30 after completing all the formalities within 30 days and that application shall be dealt with in accordance with law.
(Shree Chandrashekhar, A.C.J.)
(Arun Kumar Rai, J.)
Tanuj
Reproduced from the public record of the Jharkhand High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.