Jharkhand HC Sustains the Cancellation of GSTIN for Lethargic Delay in Filing GST Appeal U/S 107 Beyond 1 Year

The High Court of Jharkhand in a ruling carried that the stagnant approach of filing plea u/s 107 of Central Goods and Service Tax (CGST), Act 2017 to the appellate forum post 1 year and 20 days delay shall not be considered and kept the GST registration cancellation.

The applicant, M/s. Marang Buru Trust asked to set aside the whole proceeding of cancellation of the GST registration emerging from the order on 16.11.2022 as per the show cause notice on 07.10.2022, in which respondent no.3 suspended the GST registration dated 07.10.2022 on the exact day of the SCN, followed by the GST registration cancellation on 16.11.2022.

Also requested to quash and set aside the order passed via respondent no.2 whereby and whereunder, the appeal of the applicant has been rejected based on the filing post expiry of the limitation period as forecast u/s 107 of the Central Goods and Services Tax Act, 2017 (CGST Act).

The applicant’s trust is in distinct social activities in community welfare and development. On 07.10.2022, the applicant received an SCN via respondent no.3 in Form-REG-31 regarding the cancellation of GST registration.

However, the applicant was not able to furnish the response in the said duration and an order was passed dated 16.11.2022 concerning the GST registration cancellation of the applicant. The applicant then furnished a plea dated 05.12.2023 which was also dismissed on 26.07.2024.

On the exact day of obtaining an SCN from respondent no.3, it was alleged that the GST registration of the applicant was suspended without being provided a chance to be heard. Also, it claimed that even the appellate authority did not interrupt the cancellation order on merit and dismissed the matter as per the limitation. Therefore the whole proceedings for the GST registration cancellation that emerged on 16.11.2022 have been quashed and set aside and the GST registration of the petitioner be restored.

It was furnished by the respondent that the applicant is not able to provide the return u/s 39 of the Central Goods and Services Tax Act, 2017 (in short CGST Act), and as the applicant was not complying with the said procedure SCN was issued and therefore his GST registration has been cancelled as no interruption is needed with the impugned order.

It was proved that the cause of issuing the SCN is that the applicant is not able to provide the return for the continuous 6 months duration which is obligatory under the CGST Act.

Subsequently, the applicant in the argument has furnished that in the cancellation order, it was cited that the undersigned has been explained the response however the fact remains that no response was furnished via the applicant within the said duration, and as such the principles of natural justice have been refused to him.

Read Also: How to File Form GST REG-18 for Reply To Show Cause Notice?

The appeal of the applicant was indeed rejected based on the limitation as it was furnished after a lapse of more than 1 year and 20 days whereas the normal duration to file the plea is 3 months as cited u/s 107 (1) of CGST Act 2017.

The applicant firm is not been qualified for any relief based on the stagnant approach since the applicant has not furnished the return for a continuous 6 months duration and the applicant furnished the plea to the appellate forum post a 1-year and 20 days delay which is beyond the 3 months duration as cited under the act, A division bench of Chief Justice M.S. Ramachandra Rao And Justice Deepak Roshan ruled.

The court while dismissing the appeal noted that “neither there is any perversity in the order of cancellation of GST registration; nor is there any necessity for interference with the appellate order, since, the same is filed beyond the statutory period of limitation.”