In a significant ruling, the High Court of Jharkhand held that the lethargic approach of filing appeal under section 107 of Central Goods and Service Tax (CGST), Act 2017 before the appellate forum after a delay of 1 year and 20 days is not acceptable and upheld the cancellation of GST Registration.
M/s. Marang Buru Trust, the petitioner sought to set aside entire proceeding of cancellation of the GST registration arising of out of the order dated 16.11.2022 in view of the show cause notice dated 07.10.2022 whereby Respondent No.3 has suspended the GST registration on 07.10.2022 on the same day of show cause notice followed by cancellation of GST registration on 16.11.2022.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
Also prayed for quashing and setting aside the order passed by the Respondent No. 2 whereby and whereunder, the appeal preferred by the petitioner has been rejected on the ground of being filed after expiry of Limitation period as envisaged under Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act).
The petitioner trust engaged in various social activities in community welfare and development. On 07.10.2022, the petitioner received a show cause notice from respondent no.3 in Form-REG-31 regarding cancellation of GST registration. However, the petitioner was unable to file the reply within stipulated period and an order was passed on 16.11.2022 with regard to the cancellation of GST registration of this petitioner. The petitioner thereafter filed an appeal on 05.12.2023 which was also dismissed on 26.07.2024.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
It was alleged that on the same day of receiving show cause notice from respondent no.3 , the petitioner’s GST registration was suspended without being given an opportunity to be heard. Further argued that even the appellate authority did not interfere with the order of cancelation on merit and simply dismissed the case of the ground of limitation. As such the entire proceeding for cancellation of GST registration arising out of order dated 16.11.2022 be quashed and set aside and the GST registration of the petitioner be restored.
The respondent submitted that the petitioner failed to furnish the return under Section 39 of Central Goods and Services Tax Act, 2017 (in short CGST Act) and since the petitioner was not following the mandatory procedure, a show cause notice was issued and finally his GST registration has been cancelled, as such no interference is required with the impugned order.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
It was evident that the reason for issuing show cause notice is that the petitioner failed to furnish the return for a continuous period of six months which is mandatory as per the CGST Act. The petitioner during course of argument had submitted that in the order of cancellation, it has been mentioned that the undersigned has examined the reply but fact remains that no reply was filed by the petitioner within the stipulated period and as such principles of natural justice has been denied to him.
And the appeal of the petitioner was also rejected on the ground of limitation as the same was filed after a lapse of more than 1 year and 20 days; whereas the normal period for filing appeal is three months as prescribed under section 107 (1) of CGST Act 2017.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
A division bench of Chief Justice M.S. Ramachandra Rao And Justice Deepak Roshan held that the petitioner firm is not entitled for any relief on the ground of being lethargic in approach, as the petitioner did not file return for a continuous period of six months and the petitioner filed appeal before the appellate forum after a delay of 1 year and 20 days which is admittedly beyond the period of three months for filing appeal as prescribed under the Act.
While dismissing the appeal, the court observed that “neither there is any perversity in the order of cancellation of GST registration; nor is there any necessity for interference with the appellate order, inasmuch as, the same is filed beyond the statutory period of limitation.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
