2023 (1) TMI 732 - HC - GST

Cancellation of registration of petitioner - non-application of mind - time limitation provided under Section 107(1) of the Central Goods and Services Tax Act 2017 - HELD THAT - The orders cancelling registration are a serious matter they impact the registrants and therefore the concerned officer should carefully pen down the orders and not rely on the system generated orders. In this case it appears that the order dated 16.09.2019 was framed without due application of mind - those who are willing to be part of the tax regime should be given as far as possible an opportunity to do so. The matter is remitted to the Appellate Authority to examine the same on merits.

Issues:
1. Cancellation of GST registration without due application of mind.
2. Delay in filing an appeal against the cancellation order.
3. Barred appeal on limitation grounds.
4. Petitioner willing to pay outstanding tax, interest, and fine.
5. Setting aside impugned orders and remitting the matter to the Appellate Authority.

Analysis:
1. The High Court addressed the issue of cancellation of GST registration without due application of mind. The court noted that the order of cancellation was passed without proper consideration, as there were contradictory statements in the order itself. The court highlighted that the concerned officer should carefully draft such orders and not rely solely on system-generated orders. The petitioner expressed willingness to rectify the situation by paying outstanding dues, leading the court to set aside the cancellation orders.

2. Another issue dealt with by the court was the delay in filing an appeal against the cancellation order. The petitioner had filed the appeal after a significant delay of almost 2 years and 8 months. The Appellate Authority dismissed the appeal citing limitation grounds under Section 107(1) of the CGST Act, 2017. Despite the delay, the court considered the petitioner's willingness to comply with tax obligations and granted an opportunity for course correction.

3. The court specifically addressed the issue of the appeal being barred on limitation grounds. While acknowledging the delay in filing the appeal, the court emphasized the importance of allowing registrants to rectify their compliance failures. The court's decision to set aside the impugned orders and remit the matter to the Appellate Authority for a fresh examination was based on this principle.

4. The petitioner's readiness to pay the outstanding tax, interest, and fine played a crucial role in the court's decision-making process. By expressing a willingness to fulfill their tax obligations, the petitioner demonstrated a commitment to rectifying the compliance issues that led to the cancellation of their GST registration. This factor influenced the court's decision to grant the petitioner another opportunity to address the situation.

5. In conclusion, the High Court set aside the impugned orders dated 29.09.2022 and 16.09.2019 and remitted the matter to the Appellate Authority for a fresh examination on merits. The court directed the petitioner to deposit the outstanding tax, interest, and fine before the Appellate Authority proceeds further in the matter. This comprehensive analysis reflects the court's consideration of various legal aspects and the petitioner's willingness to comply with tax obligations.

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