M/S Limra Developers vs. Additional Commissioner And Another

Facts

M/s Limra Developers (the petitioner) had its Goods and Service Tax registration cancelled by the Additional Commissioner (respondent No. 2) on 01.10.2019, following a show cause notice issued on 20.09.2019 to which the petitioner failed to reply within the stipulated 7 days. The petitioner filed an appeal before the first Appellate Authority on 14.04.2021, which was significantly delayed. The first Appellate Authority rejected the appeal solely on the grounds of limitation. The petitioner then filed a writ petition before the High Court challenging the order of cancellation of registration and the order of the first Appellate Authority.

Held

The Court, without entering into the merits of the cancellation order or commenting on the coordinate bench's judgment, found the order of the first Appellate Authority dated 04.09.2021 to be unsustainable. The Court acknowledged the teething problems in the implementation of the GST regime and the intervening COVID-19 pandemic. Taking a sympathetic view, the Court held that the petitioner should not be left remediless due to technicalities of law. The Court reasoned that the Appellate Authority should have entertained the appeal and decided it on merits, as business should not be hampered by mere technicalities. Therefore, the order of the first Appellate Authority rejecting the appeal on the ground of limitation was set aside. The matter was remitted back to the first Appellate Authority to reconsider the appeal on merits, without going into the question of limitation, and decide it strictly in accordance with law, preferably within one month.

Key Issues

1. Whether the notification dated 25.06.2020, extending the period for filing revocation applications under Section 30 of the CGST Act, 2017, should be interpreted to extend the period for filing statutory appeals under Section 107 of the CGST Act, 2017, in light of the intervening COVID-19 pandemic and the Supreme Court's suo motu order extending limitation periods. Petitioner's arguments: The petitioner contended that the Government notification extending the period for filing revocation applications until 30th September 2020 should also be read as an extension for filing appeals, as the petitioner had the option of either filing a revocation application or an appeal. They relied on a coordinate bench's decision in M/s Singh Group vs. State of U.P. & 2 others and the Supreme Court's order in Suo Motu Writ Petition (c) No.3 of 2020 extending limitation periods till 28th February 2021, arguing that their appeal filed on 14.04.2021 was therefore not time-barred. Respondent's arguments: The respondent argued that the notification dated 25.06.2020 was prospective and did not apply to the petitioner whose registration was cancelled on 01.10.2019. They contended that revocation provisions cannot be equated with appeal provisions, and the extension for revocation applications cannot be read into appeal provisions. They also argued that the judgment in M/s Singh Group was not applicable and that the appeal was beyond time even considering the notification and the Act's provisions.