Bbcl Infrastructure vs. State Of U.P. And 2 Others

Held

The Court held that the first appellate authority's order rejecting the appeal on the ground of delay, without considering the delay condonation application or providing an opportunity of hearing, is unsustainable in law. The Court emphasized that the Goods and Services Tax Act, 2017, was introduced to facilitate trade and commerce and is not punitive in nature. Cancellation of registration should be a last resort, especially for small traders who may not be well-versed with legal technicalities. The appellate authority, being a quasi-judicial body, must follow the principles of natural justice and afford an opportunity of hearing to the assessee before making any decision. The Court found the appellate authority's order to be mechanical and lacking due consideration. Therefore, the order of the first appellate authority was set aside, and the matter was remitted back to the appellate authority to decide the appeal afresh after providing a due opportunity of hearing to the petitioner. The exercise was directed to be completed within one month.

Facts

The petitioner, BBCL Infrastructure, was registered under the CGST Act, 2017, for dealing in bangles and artificial ornaments. A show cause notice for cancellation of registration was issued on September 19, 2019, due to non-filing of returns for six months. The petitioner did not respond, leading to the cancellation of registration on September 30, 2019. The petitioner filed an appeal before the first appellate authority on March 30, 2022, along with a delay condonation application. The appellate authority, through a computer-generated order on the same day, rejected the appeal solely on the ground of delay in submission, without discussing the reasons for delay or providing an opportunity for hearing.

Key Issues

1. Whether the first appellate authority erred in rejecting the petitioner's appeal on the ground of delay without considering the delay condonation application and affording an opportunity of hearing, thereby violating principles of natural justice, as contemplated under Section 107 of the CGST Act, 2017? Petitioner's contention: The petitioner argued that the statutory period for filing an appeal under Section 107 of the CGST Act, 2017, is three months plus one month, and the appeal was filed with a delay due to unavoidable circumstances. The rejection of the appeal on the date of filing by a computer-generated format order, without any discussion or opportunity to be heard, is unsustainable. Respondent's contention: The State argued that the petitioner is a partnership firm, and if one partner was ill, the other should have filed the returns. They also contended that there was a long delay in filing the appeal.