Case Law Details
Man Singh Tanwar Son of Shri Gordhan Singh Vs Commissioner, Central Goods and Services Tax Department (Rajasthan High Court)
In Man Singh Tanwar vs Commissioner, Central Goods and Services Tax Department, the Rajasthan High Court considered a writ petition challenging cancellation of GST registration and the inability to file an appeal within the prescribed limitation period.
The petitioner-firm sought quashing of the order dated 14.03.2023 cancelling its GST registration. It had also raised alternative prayers challenging Section 107(4) of the CGST/RGST Act and seeking harmonization of limitation provisions. However, during arguments, the petitioner did not press the constitutional challenge to Section 107(4), leaving that issue open.
The petitioner-firm was registered under GST and engaged in business. A show cause notice dated 03.02.2023 was issued for non-filing of monthly returns for six months, requiring a reply within thirty days. Due to the illness of the petitioner’s grandfather, the petitioner did not respond to the notice. Consequently, the GST registration was cancelled by order dated 14.03.2023.
The petitioner submitted that the same illness prevented filing of an appeal under Section 107(1) within the limitation period. Medical records were produced to substantiate the claim. The petitioner also attempted to file an appeal on the GST portal, but the system displayed that the limitation period had expired.
The Court noted that the CGST/RGST Act contains provisions of limitation under Section 107, which bind statutory authorities and restrict their power to condone delay beyond the prescribed period. However, such limitations do not bind the writ court exercising jurisdiction under Article 226 of the Constitution. The Court observed that the legislative intent of the GST framework is to facilitate commercial and business activities, and that a statutory right of appeal should ordinarily be decided on merits.
The Court considered the explanation provided by the petitioner regarding delay, supported by medical evidence of the grandfather’s illness. It found that the petitioner had shown sufficient cause for not filing the appeal within time. The Court also emphasized that its powers under Article 226 are exercised in public interest and to ensure justice.
In these circumstances, the Court held that the petitioner should be given an opportunity to contest the matter on merits. It therefore exercised its writ jurisdiction to condone the delay and directed that the appeal filed by the petitioner be restored to its original position.
Accordingly, the writ petition was allowed, and the appeal bearing reference number ZA080323041640Y was restored for consideration by the appellate authority.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
The petitioner-firm has made the following prayers:-
“In peculiar facts and circumstances of the present case, it is, therefore, most respectfully and humbly prayed that the Writ Petition may kindly be allowed and by an appropriate writ, order or direction-
i. The Impugned Order dated 14.03.2023 (Annexure-3) cancelling the GST registration of Petitioner’s firm may kindly be quashed;
ii. In the alternative, Section 107(4) of CGST/RGST Act, 2017 may be struck down in so far as same limits the power of Appellate authority to entertain first appeal beyond a period of one month from the expiry of period of limitation prescribed under Section 107(1) and it may be simultaneously held that Appellate Authority has the power to condone any delay upon being satisfied that Petitioner/Assessee was prevented by sufficient cause from not filing the appeal against the order of cancellation of GST registration;
iii. Section 107(1) and Section 107(2) may be harmonized & reconciled by holding that both the Petitioner/Assessee as well as the Department are entitled to equal period of limitation of six months for preferring first appeal.
iv. Any other order or direction which this Hon’ble Court deems just and proper may kindly be passed.”
2. After arguing for some time, Mr. Sharad Kothari the learned counsel assisted by Mr. Pranjul Mehta appearing for the petitioner-firm does not press the alternative prayer vide clause (ii) and submits that challenge to the provisions under Section 107(4) of the CGST/RGST Act, 2017 may be left open at this stage.
3. The petitioner-firm is aggrieved by the cancellation of its GST Registration. The petitioner-firm has pleaded that it was registered under the GST regime with GST Registration No. 08BAMPT6831K1ZZ. It has further pleaded that a show cause notice dated 3rd February 2023 was issued seeking its explanation within thirty days for not filing its monthly returns for a period of six months and, pursuant thereof, its GST Registration was cancelled by an order dated 14th March 2023. Mr. Sharad Kothari the learned counsel assisted by Mr. Pranjul Mehta appearing for the petitioner-firm refers to Annexure-6 which is the information flashed on the website when the petitioner-firm attempted to file its appeal.
4. In this writ petition, the petitioner-firm, namely, Jai Sunda Maa is represented through its proprietor, namely, Man Singh Tanwar has made statements to demonstrate that it was on account of illness of his grandfather that he could not approach the respondent-Authority by filing an application under Section 30 of the Central Goods and Services Tax Act, 2017 (in short, ‘the CGST Act’). Mr. Sharad Kothari, the learned counsel assisted by Mr. Pranjul Mehta appearing for the petitioner-firm submits that it was on account of the illness of the grandfather of the petitioner-firm that an appeal under Section 107(1) of the CGST Act could not be filed in time and, as a consequence thereof, the order dated 14th March 2023 could not be challenged by the petitioner-firm.
5. In paragraph no. 6 of the writ petition, the following statements have been made on behalf of the petitioner-firm:-
“________________________________
6. That, for the purposes of clarity and understanding, a brief factual narration pertaining to instant controversy is contained in the forthcoming paragraphs.
(i) That the Petitioner is registered tax payer under the Act and has always complied with the applicable provisions under the Act. However, due to the severe ailment of Petitioner’s grand-father, the Petitioner, as per the mandate of Section 39 of the Act, could not furnish its return in Form GSTR-3B, for a continuous period of 6 months. Medical records relating to the ailment of Petitioner’s grand-father are submitted herewith and marked as Annexure-4.
(ii) That, because of which, the Petitioner received a Show Cause Notice, 03.02.2023, seeking explanation within 30 days for non-filing of its monthly returns for a period of 6 months.
(iii) That, owing to ill health of the grand-father of the Petitioner, he could not respond to the SCN dated 03.02.2023. A true and correct copy of the Show Cause Notice, dated 03.02.2023, is annexed and marked herewith as Annexure
-5.
(iv) Pursuant to the aforesaid Show Cause Notice and to dismay of the Petitioner, an Order for cancellation of Petitioner’s GST registration, dated 14.03.2023, was passed by Respondent No.2
(v) Because, thereafter the Petitioner’s registration was cancelled, the fact of passing of order dated 14.03.2023 escaped attention of the Petitioner, and therefore, the remedy to challenge the same in terms of Section 30 was rendered barred by limitation prescribed under Section 107. An attempt was made by the Petitioner to file the appeal on the portal which resulted in flashing of message that the time period for filing the appeal has expired in relation to order dated 14.03.2023. Copy of the screen shot of the warning message taken from the portal is submitted herewith and marked as Annexure-6.”
6. This is quite well known a fact that the object behind enacting the CGST/RGST Act, 2017 is to levy taxes on manufacture of certain goods in the form of Central Excise Duty and to levy tax by the State Governments on retail sales in the form of Value-added Tax, Entry Tax, Luxury Tax etc. The legislative intention to facilitate commercial and business activities is reflected in the several provisions under the CGST/RGST Act; one of such provisions is contained under Section 30. May be the statutory provisions of limitation under Section 107 of the CGST/RGST would bind the statutory authorities which cannot condone the delay except the circumstances envisaged thereunder, but then, such limitations are not binding on the writ Court. Therefore, the writ Court having regard to the facts and circumstances in the case and keeping in mind that a right to appeal provided under the statute should normally be decided on merits may condone the delay and direct the statutory authority to entertain the appeal beyond the period of limitation.
7. We are quite alive to the legal proposition that the powers under Article 226 of the Constitution of India are exercised for public good and in the public interest. The petitioner-firm has pleaded that on account of illness of the grandfather of its proprietor, necessary steps for filing of the statutory appeal within the period of limitation could not be taken. In support of this plea, the proprietor of the petitioner-firm has produced medical reports and certificates disclosing illness of his grandfather. We are, therefore, of the opinion that an opportunity should given to the petitioner-firm to contest the matter on merits for restoration of its GST Registration.
8. For the foregoing reasons, we are inclined to entertain the present writ petition and the appeal preferred by the petitioner-firm vide Reference Number: ZA080323041640Y is restored to its original records.
9. D.B. Civil Writ Petition No. 14658/2024 is allowed in the aforesaid terms.
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