2025 (6) TMI 97 - HC - GST

Condonation of delay in filing an appeal under Section 107 of the CGST Act - HELD THAT - In M/S VISHWA ENTERPRISE VERSUS STATE OF GUJARAT 2025 (3) TMI 1487 - GUJARAT HIGH COURT wherein on squarely similar facts it was argued that the copy of the impugned order therein ought to have been signed by the concerned authority and the same not being signed is invalid. The Gujarat High Court while considering the facts and contentions inter alia held that in view of the fact that the impugned order therein was uploaded on the GSTN portal which can only be done after verification by the concerned State Tax Officer the said order is valid. Thus in the opinion of this Court the review petition is unmerited both on the issue of lack of error apparent on the face of the record as also on merits. Review petition dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter include:

(a) Whether delay in filing an appeal under Section 107 of the Central Goods and Services Tax (CGST) Act can be condoned;

(b) Whether the impugned Show Cause Notice (SCN) and the Order of Cancellation of Registration Certificate (RC) were valid and legally enforceable despite the presence of a digital signature stamp indicating "Signature Not Verified" and being digitally signed by the Goods and Services Tax Network (GSTN) rather than a proper officer;

(c) Whether the cancellation of the Registration Certificate was legally sustainable given the grounds stated, particularly the allegation of failure to furnish returns for a continuous period of six months when the petitioner had already applied for cancellation;

(d) Whether the limitation period for filing the appeal commenced only upon receipt of a properly signed order by the proper officer;

(e) Whether the retrospective cancellation of the Registration Certificate without prior notice or explicit mention in the SCN was lawful;

(f) Whether the Court erred in not considering the merits of the petitioner's other contentions due to dismissal on the ground of delay.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Condonation of Delay in Filing Appeal under Section 107 of the CGST Act

Relevant Legal Framework and Precedents: The Court relied on the statutory provisions of Sections 107(1) and 107(4) of the CGST Act, which prescribe a strict limitation period for filing appeals against orders passed under the Act. The Court examined whether the Limitation Act, 1963, could be invoked to condone delay in such appeals.

Court's Interpretation and Reasoning: The Court held that the power to condone delay depends on the statutory regime governing the limitation period. If the statute creates a special and independent regime with respect to limitation, the general provisions of the Limitation Act do not apply. Since the CGST Act prescribes a specific limitation period for appeals under Section 107 and proscribes entertaining appeals beyond the terminal date, delay cannot be condoned.

Key Findings: The appeals filed beyond the prescribed period were barred by limitation. The Court dismissed the writ petitions on this ground alone, without delving into the merits.

Application of Law to Facts: The petitioner filed the appeal on 18th October 2023, beyond the limitation period expiring on 17th August 2023. Hence, the appeal was rightly rejected as time-barred.

Treatment of Competing Arguments: The petitioner argued for condonation of delay, but the Court found no statutory basis for it under the CGST Act.

Conclusion: Delay in filing appeal under Section 107 of the CGST Act is not condonable.

Issue (b): Validity of the Show Cause Notice and Cancellation Order Despite Digital Signature Stamp "Signature Not Verified"

Relevant Legal Framework and Precedents: The issue pertains to the authenticity and validity of digitally signed orders under GST law. The Court considered precedents including M/s Vishwa Enterprise v. State of Gujarat, where a similar contention was rejected on the ground that orders uploaded on the GSTN portal are digitally signed and verified by the concerned officer.

Court's Interpretation and Reasoning: The Court noted that the impugned order bears the name, designation, ward number, and digital signature of the official. The presence of the phrase "Signature Not Verified" was held to be a technical glitch and did not invalidate the order. Uploading on the GST portal requires verification by the State Tax Officer through digital signature, which lends authenticity.

Key Evidence and Findings: The order was digitally signed by the Superintendent and uploaded on the GSTN portal, indicating official sanction and verification.

Application of Law to Facts: The petitioner's argument that the order was unsigned and hence void was rejected. The Court held that the order is a valid, enforceable official document.

Treatment of Competing Arguments: The petitioner relied on judgments requiring signed orders, but the Court distinguished those by emphasizing the digital verification process under GST.

Conclusion: The digital signature and uploading on the GSTN portal render the order valid despite the "Signature Not Verified" stamp.

Issue (c): Legality and Grounds of Cancellation of Registration Certificate

Relevant Legal Framework and Precedents: Section 29(2) of the CGST Act prescribes grounds for cancellation of registration, including failure to furnish returns for a continuous period of six months. The petitioner contended that the cancellation was illegal as the six-month period had not expired and that the petitioner had already applied for cancellation.

Court's Interpretation and Reasoning: The Court noted that the petitioner's application for cancellation was pending and that the SCN was issued before the six-month period had elapsed. The petitioner argued that the cancellation order was arbitrary, illegal, and violated principles of natural justice and statutory provisions.

Key Evidence and Findings: The SCN dated 3rd February 2023 cited failure to furnish returns for six months as the reason. The petitioner had applied for cancellation on 9th March 2022. The cancellation order directed payment of zero amount, contradicting the SCN's allegations.

Application of Law to Facts: The Court did not examine these contentions on merits as the appeal was dismissed on limitation grounds. However, the petitioner relied on a prior judgment emphasizing illegality of retrospective cancellation without due process.

Treatment of Competing Arguments: The Court observed that since the appeal was time barred, the merits were not considered. The petitioner's challenge to the grounds of cancellation remained unaddressed substantively.

Conclusion: The Court did not adjudicate on the legality of cancellation due to dismissal on limitation grounds.

Issue (d): Commencement of Limitation Period for Filing Appeal

Relevant Legal Framework: Section 107 of the CGST Act prescribes the limitation period from the date of communication of the order.

Court's Interpretation and Reasoning: The petitioner contended that limitation should run only from receipt of a properly signed order. The Court rejected this contention, holding that the order was validly communicated and digitally signed.

Key Findings: The limitation period was correctly computed from the date of communication of the order dated 18th April 2023.

Conclusion: Limitation period commenced upon communication of the valid order, irrespective of the petitioner's contention on signature verification.

Issue (e): Lawfulness of Retrospective Cancellation Without Prior Notice

Relevant Legal Framework and Precedents: The petitioner relied on judicial authority emphasizing that retrospective cancellation without prior notice or explicit mention in the SCN is unlawful and violates principles of natural justice.

Court's Interpretation and Reasoning: The Court did not examine this contention on merits due to dismissal on limitation grounds but recorded the petitioner's submissions.

Conclusion: No determination was made on this issue due to procedural dismissal.

Issue (f): Consideration of Merits Despite Dismissal on Delay

Court's Reasoning: The Court held that once the appeal was dismissed as barred by limitation, there was no requirement to consider the merits of the petitioner's contentions.

Conclusion: The Court did not consider the petitioner's substantive arguments beyond delay.

3. SIGNIFICANT HOLDINGS

"The power to condone delay caused in pursuing a statutory remedy would always be dependent upon the statutory provision that governs. The right to seek condonation of delay and invoke the discretionary power inhering in an appellate authority would depend upon whether the statute creates a special and independent regime with respect to limitation or leaves an avenue open for the appellant to invoke the general provisions of the Limitation Act to seek condonation of delay. The facility to seek condonation can be resorted provided the legislation does not construct an independent regime with respect to an appeal being preferred. Once it is found that the legislation incorporates a provision which creates a special period of limitation and proscribes the same being entertained after a terminal date, the general provisions of the Limitation Act would cease to apply."

"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."

"In view of the fact that the impugned order was uploaded on the GSTN portal which can only be done after verification by the concerned State Tax Officer through its portal after logging into the portal using the digital signature, the contention that the impugned notice and the order are unsigned does not merit any acceptance."

Core Principles Established:

- Statutory limitation periods under the CGST Act are strictly enforced, and delay in filing appeals cannot be condoned unless the statute permits.

- Digital signature and uploading of orders on the GSTN portal constitute valid authentication, and minor technical glitches in signature verification do not invalidate orders.

- Appeals filed beyond the statutory limitation period are liable to be dismissed without consideration of merits.

Final Determinations:

- The review petition challenging the dismissal of the writ petition on the ground of delay was dismissed.

- The Court upheld the validity of the impugned cancellation order despite the petitioner's challenge regarding digital signatures.

- The Court declined to consider the merits of the petitioner's challenge to the cancellation order due to dismissal on limitation grounds.