A Single Bench of the Kerala High Court recently observed that the appeal Provision of the Central Goods and Services Tax Act, 2017 (CGST) is inbuilt mechanism and impliedly excludes the application of Limitation Act, 1963.
The petitioner, Penuel Nexus Pvt Ltd is a firm engaged in direct marketing and had a GST registration. Due to the Covid-19 pandemic, the petitioner’s business got affected and was prevented from filing the returns on time. The respondents, cancelled the GST registration. Even though the petitioner preferred an appeal before the Additional Commissioner (Appeals), the appeal was rejected on the ground of delay. Hence, the writ petition was filed stating that the cancellation of GST Registration and the order by the Additional Commissioner are both arbitrary and unjustifiable.
The Counsel for the petitioner argued that it was only due to the Covid-19 pandemic that the petitioner was prevented from filing the return on time. The petitioner’s appeal was perfunctorily rejected, by the Additional Commissioner and hence the order is erroneous.
The Counsel placed reliance on the decision of the High Court of Uttarakhand in Vinod Kumar v. Commissioner Uttarakhand State GST and Ors to canvass the position that as there is an infringement of the petitioner’s right to life, and hence the High Court can set aside cancellation of GST Registration and the order by the Additional Commissioner under Article 226 of the Constitution of India.
The Government Pleader countered the above submission by contending that by virtue of Section 29(2)(c) of the Central Goods and Services Tax Act, 2007, the proper officer has the power to cancel the GST registration if the registered person does not file the returns for such continuous period as may be prescribed, which at that point of time was six months.
The Counsel pleaded that if the person is aggrieved by the cancellation; his remedy is to file an appeal under Section 107 of the Act. However, the appeal has to be filed within the time frame prescribed under Section 107(4) of the Act, that is, three/six months, as the case may be, with a further period of one month and hence the appeal preferred by the petitioner is time barred.
Confirming the action of the Additional Commissioner a Court of Justice CS Dias, observed that “The Central Goods and Services Tax Act is a special statute and a self-contained code by itself. Section 107 is an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite, that the Limitation Act will apply only if it is extended to the special statute. It is also rudimentary that the provisions of a fiscal statute have to be strictly construed and interpreted.”
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