Case Law Details
Vishwas Enterprises Vs Commissioner (Appeals) of Central Goods And Service Tax (Rajasthan High Court)
The Rajasthan High Court allowed a writ petition challenging the dismissal of an appeal against cancellation of GST registration on the ground of limitation. The petitioner sought condonation of a delay of 720 days in filing an appeal against an Order-in-Original dated 08.07.2022, by which its GST registration had been cancelled. The appeal was filed on 25.10.2024 but was rejected by the Appellate Authority on 15.01.2025 because the authority lacked statutory power to condone such a delay under Section 107 of the GST Act.
The petitioner contended that the delay occurred due to unavoidable and bona fide circumstances beyond its control. It was submitted that the petitioner was facing severe financial hardship and acute shortage of funds during the relevant period, which adversely affected its ability to attend to legal and financial matters, including filing the appeal within the prescribed limitation period.
The petitioner further explained that an amount of ₹16,59,151 remained outstanding from a buyer against an invoice dated 16.03.2022, causing substantial financial constraints. Legal proceedings had already been initiated for recovery of the dues through the MSME Samadhan Online Portal before the Micro and Small Enterprises Facilitation Council, Udaipur. The petitioner stated that it now intended to regularize its business operations and sought restoration of GST registration to continue lawful business activities. According to the petitioner, the delay was neither deliberate nor caused by negligence but was the result of genuine financial difficulties.
The petitioner relied on several Division Bench judgments of the Rajasthan High Court, including decisions in Molana Construction Company, Man Singh Tanwar, and RPC PSIPL cases, to argue that where sufficient cause for delay is established and circumstances are beyond the taxpayer’s control, the High Court can direct consideration of the appeal on merits.
The respondents opposed the petition and argued that the appeal was clearly barred by limitation and that the Appellate Authority had correctly rejected it.
After considering the submissions and examining the record, the High Court observed that while the Appellate Authority is bound by the statutory limitation provisions contained in Section 107 of the Rajasthan GST Act and lacks power to condone delays beyond the prescribed period, the facts of the case demonstrated circumstances beyond the petitioner’s control. The Court held that refusal to consider the appeal on merits would cause grave prejudice and injury to the petitioner.
The Court referred to its earlier judgments where similar relief had been granted and appeals were directed to be entertained on merits despite delays. It also relied upon its decision in M/s M R Traders v. Union of India, which distinguished the limited statutory powers of the Appellate Authority from the wider constitutional powers of the High Court under Article 226 of the Constitution.
The Court noted that the Appellate Authority cannot invoke Section 5 of the Limitation Act or exercise unrestricted discretion beyond the ceiling prescribed under Section 107(4) of the GST law. However, constitutional courts possess the authority to intervene in appropriate cases to prevent complete denial of a remedy.
The High Court further observed that the GST law is not merely a revenue collection statute but a comprehensive fiscal framework intended to facilitate trade, commerce, and business continuity. It emphasized that cancellation of GST registration or missed appellate deadlines should not permanently exclude a taxpayer from the GST system, particularly where the taxpayer is willing to comply with statutory obligations and rectify defaults.
The Court noted that non-restoration of GST registration can directly impair a person’s ability to conduct business and earn a livelihood, resulting in serious hardship. It reiterated that an overly technical approach that renders statutory remedies ineffective would defeat the objectives of the GST regime.
Following its consistent view in earlier decisions, the High Court condoned the delay of 720 days, after accounting for the statutory relaxation of 120 days available under Section 107 of the CGST Act. The impugned appellate order dated 15.01.2025 was set aside, and the Appellate Authority was directed to entertain the petitioner’s appeal and decide it on merits. All pending applications and the stay petition were also disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. The petitioner herein, inter alia, seeks a direction commanding respondent No.1 to condone the delay of 720 days in filing the appeal against the Order-in-Original dated 08.07.2022, passed by the Superintendent, Udaipur, whereby order for cancellation of GST registration was issued against the petitioner. The appeal against the said order was filed on 25.10.2024. However, the Appellate Authority vide order dated 15.01.2025 dismissed the appeal on the ground of limitation as it does not have the power to condone the delay in filing the appeal.
2. Learned counsel for the petitioner submits that the delay in filing the appeal occurred due to unavoidable and bona fide circumstances beyond the control of the petitioner. During the relevant period, the petitioner was facing acute financial hardship and severe paucity of funds, which substantially impaired their ability to effectively attend to financial and legal matters, including the filing of the appeal within the prescribed period of limitation. The delay is thus occasioned by genuine and sufficient cause, and not due to any negligence or lack of diligence on the part of the petitioner.
2.1 It was further submitted that since amount of Rs.16,59,151/- remained outstanding from the buyer against invoice no.1 dated 16.03.20221, it resulted in severe financial constraints. Petitioner has already initiated legal proceedings for recovery of the said dues under the MSME Samadhan Online Portal before the Micro and Small Enterprises Facilitation Council, Udaipur and now seeks to regularize its business operations by obtaining restoration of its GST registration to continue lawful business activities. Accordingly, the delay is bona fide, arising out of genuine hardship, and not attributable to any wilful negligence or malafide intent.
2.2 Owing to these circumstances, the petitioner could not take necessary steps within the prescribed period. The delay was neither intentional nor due to any negligence, but was caused solely by the genuine difficulties faced during the said period. It is, therefore, most respectfully prayed that the delay in filing the appeal be kindly condoned in the interest of justice.
3. In the aforesaid backdrop, we have heard the learned counsels for the parties and perused the record.
4. Learned Counsel for the petitioner, relying on the various Division Bench judgments of this very Court in M/s Molana Construction Company v. Central Goods and Service Tax Department & Ors2, Man Singh Tanwar v. Commissioner, Central goods and Services Tax Department & Ors.3, RPC PSIPL ]V Vs. State of Rajasthan & Ors4and RPC PSIPL ]V Vs. State of Rajasthan & Ors5 argues that sufficient cause of delay in filing the appeal due to circumstances beyond control has been shown and thus appeal be directed to be considered on merits after condoning the delay by this Court.
5. Learned counsel for the respondents opposes the above submission and contends that the assessment order has rightly been passed, appeal is now barred by limitation.
6. Having heard, as above, it transpires that while it is true that the Appellate Authority is bound by the statutory provisions of limitation provided under Section 107 of the RGST Act, however, considering the reasons owing to which the petitioner could not file its appeal within the stipulated time, being beyond its control, non- adjudication of appeal on merits would cause grave injury and prejudice to the petitioner.
7. In the judgments cited above in para 4 of preceding part of instant order, this Court, while allowing the writ petitions, issued directions to entertain the appeal on merits.
8. In the context of present case, where cancellation of GST registration results in loss of livelihood, reference may also be had to another judgment of this Court in M/s M R Traders v. UOI6. For ready reference, relevant portion thereof is reproduced hereinbelow:-
“11.5. The distinction, therefore, is not one of sympathy or sufficiency of cause, but of jurisdictional competence. While constitutional courts, exercising plenary powers under Article 226 of the Constitution of India, may in appropriate cases condone delay so as to prevent a complete denial of remedy, such constitutional elasticity cannot be transposed into the statutory framework governing the Appellate Authority.
11.6. Thus, we are of the opinion that the statutory scheme under Section 107 admits of no discretion with the appellate authority to grant extension beyond the expressly prescribed period. The application of the Limitation Act stands unequivocally excluded by necessary implication. Accordinly, we hold that the Appellate Authority does not possesses the unrestricted discretion under Section 5 of the Limitation Act to condone delay beyond the ceiling prescribed in Section 107(4).
12. It is also pertinent to note that the CGST Act is not a statute enacted solely for revenue collection. It represents a comprehensive fiscal reform intended to consolidate multiple indirect taxes and, at the same time, to facilitate trade, commerce, and business continuity. This legislative intent is clearly discernible from the scheme of the Act, particularly the provisions relating to revocation of cancellation of registration under Section 30 and appellate remedies under Section 107. The emphasis of the statute is thus not merely punitive compliance, but regulated facilitation of economic activity. Any interpretation which renders statutory remedies illusory on hyper-technical grounds would defeat the very purpose of the enactment.
13. Cancellation of GST registration or missed appellate deadlines should not permanently debar a taxpayer from the GST framework, especially where the taxpayer intends to comply by filing returns, paying taxes, interest, and penalties, and rectifying defaults. In such cases, denial of opportunity to an assessee undermines the inclusive and facilitative objective of the GST regime. Non-restoration of GST registration in such cases also directly impairs the assessee’s ability to conduct business, earn a livelihood and leads economic paralysis, thus, violating Articles 14 and 21 of the Constitution by imposing disproportionate and unreasonable hardship.”
9. In the premise, following the consistent view as already taken by this Court, ibid, we allow the present writ petition to the extent of condoning the delay of 720 days (after granting relaxation of 120 days under Section 107 of CGST Act) in filing of the appeal by the petitioner.
10. Accordingly, the impugned appellate order dated 15.01.2025 is set aside. Delay of 720 days in filing of the appeal is condoned. The Appellate Authority is directed to entertain the appeal of the petitioner and adjudicate the appeal on merits.
11. Stay petition and all pending application stands disposed of.
Notes:
1 As per application filed by petitioner before the MSME SAMADHAAN online portal before the Micro and Small Enterprises Facilitation Council, Udaipur (annexure-6)
2 2024 SCC OnLine Raj 3938
3 D.B. CWP 14658/2024
4 D.B. CWP 7260/2025
5 D.B. CWP 11794/2025
6 2026 SCC OnLine RAJ 2115
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