2025 (7) TMI 1194 - HC - GST

Condonation of delay in filing appeal - sufficient cause for the Petitioner for delay in filing of the appeal or not - Cancellation of GST registration - HELD THAT - There is no doubt that under Section 112 of the CGST Act there is a period of limitation which has been fixed for filing of the appeal. The question as to whether delay in appeal can be condoned is presently stated to be pending before the Supreme Court. A perusal of the provision of section 107 would show that if there is sufficient cause shown while filing the appeal the delay is condonable. There is no negative terminology such as not thereafter or similar language used in Section 107(4) of the CGST Act. Moreover the stand of the Petitioner is that the order was never communicated to the Petitioner. The limitation period would run only once the order is communicated - The question is to whether the cancellation order was served or not could be a question of fact which the Appellate Authority would have to consider before rejecting the appeal. Under these circumstances and bearing in mind the adverse impact that the GST registration cancellation can have on the Petitioners rendering of professional services it is deemed appropriate to hold that the Petitioner has made out a sufficient cause for condonation of delay in filing of the appeal before the Appellate Authority. Hence subject to the deposit of Rs. 25, 000/- as costs with the Department the appeal before the Appellate Authority is restored to its number. Let the same be now adjudicated by the Commissioner (Appeals) - petition disposed off.

Summary

ISSUES:

Whether delay in filing appeal against cancellation of GST registration can be condoned under Section 107(4) of the Central Goods and Services Tax Act, 2017 (CGST Act).Whether non-receipt or non-communication of the Show Cause Notice (SCN) and cancellation order affects the limitation period for filing appeal.Whether the Appellate Authority erred in dismissing the appeal on the ground of limitation by relying on Section 112 of the CGST Act instead of Section 107.Whether the cancellation of GST registration without personal hearing and proper communication violates principles of natural justice.Whether the Petitioner has made out "sufficient cause" for condonation of delay in filing the appeal.

RULINGS / HOLDINGS:

The Court held that under Section 107(4) of the CGST Act, "if the Appellate Authority is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period... [it] may allow it to be presented within a further period of one month," and therefore delay in filing appeal is condonable upon sufficient cause.The limitation period for filing appeal begins only when the order is communicated to the aggrieved party; hence, non-communication or non-receipt of the SCN and cancellation order affects the running of limitation.The Appellate Authority erred in relying on Section 112 of the CGST Act, which pertains to appeals before the Appellate Tribunal, instead of Section 107 which governs appeals before the Appellate Authority.The absence of personal hearing and failure to communicate the SCN and cancellation order constitute procedural irregularities that must be examined by the Appellate Authority as questions of fact.The Petitioner has demonstrated "sufficient cause" for condonation of delay in filing the appeal before the Appellate Authority, considering the adverse impact of GST registration cancellation and the procedural facts.Accordingly, the appeal is restored to its number subject to the deposit of costs, and the Appellate Authority is directed to adjudicate the appeal on merits, including granting opportunity to file pending returns.

RATIONALE:

The Court applied the statutory framework of the CGST Act, particularly Sections 107 and 112, distinguishing the appellate jurisdiction and limitation provisions applicable to the Appellate Authority versus the Appellate Tribunal.The Court emphasized the principle that limitation for filing appeal commences upon communication of the order, consistent with established legal doctrine on limitation and service of notice.The Court noted the absence of explicit negative language in Section 107(4) regarding condonation of delay, supporting a liberal interpretation to allow appeals where "sufficient cause" is shown.The Court recognized the procedural safeguards under the CGST regime, including the requirement of service of SCN and opportunity of hearing, as essential to uphold natural justice.The Court acknowledged the pending Supreme Court consideration on condonation of delay under the CGST Act but proceeded on existing statutory interpretation and facts before it.No dissent or doctrinal shift was indicated; the Court's reasoning aligns with principles of procedural fairness and statutory construction favoring substantive adjudication over technical dismissal.