Delay cannot be condoned in an appeal u/s 107 of CGST Act: Delhi HC Dismisses Review Petition [Read Order]

In a recent case, the Delhi High Court has held that delay cannot be condoned in an appeal under section 10 of the Central Goods and Service Tax Act, (CGST ), 2017 and dismissed the review petition.

The Petitioner Aditya Madaan sought reviewing of the judgment dated 7th February, 2025 ( the ‘judgment’) passed in a batch of matters titled M/s Addichem Speciallity LLP v. Special Commissioner I, Department of Trade and Taxes Anr. (2025:DHC;737-DB). Vide the said judgment, the Court inter alia decided the issue, whether delay can be condoned in an appeal under Section 107 of the CGST Act. On this issue, it was held that the delay is not condonable. The submission of Mr. A.K. Babbar, Counsel appearing for the review applicant, who was the Petitioner in the matter, is that apart from the issue of delay, there were various other grounds which were raised in the writ petition.

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It is the submission of Counsel for the Petitioner that in the judgment, apart from the issue of delay no other contentions of the Petitioner have been considered. His submission is that since the impugned order dated 18th April, 2023 was not properly signed, it was not an order in law and therefore, the writ petition deserved to be allowed.

The petitioner submitted that the SCN dated 03.02.2023, reflected the reason for cancellation of the Registration Certificate, which reads as follows: “Failures to furnish returns for a continuous period of six months" in facts and circumstances is not an erroneous reason when six months period has not exhausted."

The petitioner submitted that this reason does notsuffice as he had applied for the cancellation of the Registration Certificate on 09.03.2022. The order dated 18.04.2023 directed the petitioner to pay "ZERO" (0) amount, contradicting the SCN dated 03.02.2023, which alleged failure to pay tax, interest, or penalty beyond six months from the due date. The cancellation order dated

18.04.2023, based on the SCN dated 03.02.2023, is illegal, arbitrary, and invalid, as the cited reason is incorrect. The SCN was issued before the six-month period had expired, and the petitioner had already applied for cancellation, which was still pending. Therefore, the order violates Section 29(2) of the CGST Act, rendering it legally flawed.

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Aggrieved by the cancellation of the RegistrationCertificate, the petitioner filed an appeal before the Appellate Authority on 18.10.2023, which was rejected on 09.01.2024 for being time-barred. The petitioner contends that the RegistrationCertificate was suspended on the same day the Show SCN dated 03.02.2023 was issued, and no order revoking the suspension was passed within a reasonable time. Instead, the impugned cancellation order was arbitrarily issued after a prolonged period on 18.04.2023.

The cancellation, citing non-filing of returns for a continuous period of six months, lacks statutory backing as it does not fall within the causes outlined in Section 29(2) of the CGST Act. Furthermore, the retrospective cancellation of the RC, without prior notice or explicit mention in the SCN, is unlawful and exceeds the authority conferred by law.

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The order having been passed on 18th April, 2023, the same was appealable by the Petitioner in terms of Section 107 of the CGST within a period of 3+1 months i.e., 4 months from the date the order was communicated to the person concerned. Thus, the limitation period for filing the said appeal expired on 17th August, 2023. However, the appeal was filed on 18th October, 2023, which was rejected by the Appellate Authority on the ground that the same was barred by limitation.

In view of the absence of the GST Appellate Tribunal, a writ petition being W.P.(C) 5650/2024 has been first preferred under Article 226 of the Constitution of India and the prayer in the writ petition was for setting aside of the impugned order dated 9th January, 2024 passed by the Office of the Commissioner of Central Tax Appeals-II, Delhi along with the order dated 18th April, 2023.

The Court in the said writ petition, after recording the stand of the Petitioner, dismissed the writ petition on the ground that the appeal could not be entertained as it was barred by limitation. The Court held that the delay in filing the appeal was not condonable. When the delay in filing the appeal was not condonable, the arguments raised by the Appellant i.e., the Petitioner herein, on merits in the said appeal, was not required to be considered by the Court inasmuch as after deciding the legal issue, the petition was dismissed.

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It was clear that the authenticity, credibility and the legitimacy of the order cannot be questioned as the name of the official, his designation, his ward number, range number along with the digitally signed stamp is appearing clearly in the said order. In the opinion of this Court, there may be some technical glitch with the wording in the Stamp “Signature Not Verified” but the same is digitally signed and the said expression would not render the order void or non est as is being argued. The fact that the officer has digitally signed the order and the order is uploaded on the GST portal renders the same as a valid order.

A division bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma viewed that the review petition is unmerited, both on the issue of lack of error apparent on the face of the record as also on merits and dismissed the petition.

To Read the full text of the Order CLICK HERE

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