Order Rejecting GST Registration Cancellation Appeal set Aside

Order Rejecting GST Registration Cancellation Appeal set Aside and 167-Day Delay Condoned on Merits

Issue

Whether the High Court can exercise its writ jurisdiction to condone a 167-day delay in filing an appeal against a GST registration cancellation order under Section 107 of the CGST/RGST Act, where the statutory appellate authority lacks the power to condone delay beyond the prescribed statutory limit.

Facts

Registration Cancellation: The petitioner, a registered person under GST, had their GST registration cancelled by the Deputy Commissioner via an Order-in-Original.
Delayed Appeal: The petitioner filed a statutory appeal before the Appellate Authority under Section 107 with a delay of 167 days, seeking condonation of the delay.
Reasons for Delay: The petitioner cited bona fide, uncontrollable circumstances for the delay, including business discontinuance, a “fraud-tag” applied during a special drive, subsequent ITC reversal notices, and a direct impact on livelihood.
Appellate Rejection: The Appellate Authority dismissed the appeal as time-barred, holding that it possessed no statutory power under Section 107 to condone delay beyond the extended period permitted under the Act.
Revenue’s Opposition: The respondents opposed the writ petition strictly on the ground of statutory limitation.

Decision

The High Court acknowledged that while the Appellate Authority is strictly bound by the statutory limitation limits under Section 107, non-adjudication on merits in such circumstances would cause grave prejudice to the petitioner.
Following the consistent view of the Division Bench, the Court observed that matters involving cancellation of GST registration directly impact livelihood and warrant a liberal approach to enable adjudication on merits.
The impugned appellate order dismissing the appeal as time-barred was set aside.
The delay of 167 days was condoned, and the Appellate Authority was directed to entertain the appeal and decide it on merits [Paras 9 and 10].
The matter was decided in favor of the assessee and remanded for fresh adjudication.

Key Takeaways

High Court Writ Powers Exceed Statutory Limits: While statutory Appellate Authorities cannot condone delay beyond Section 107 limits, the High Court under Article 226 can condone extra-statutory delays in deserving cases to prevent grave injustice.
Livelihood Considerations in GST Cancellations: Cancellation of GST registration directly affects a taxpayer’s fundamental right to carry on business and livelihood, justifying judicial intervention to ensure appeals are decided on merits.
Bona Fide Reasons Prevail: Uncontrollable circumstances and hardship caused by departmental enforcement drives serve as valid grounds for High Courts to restore appeals dismissed on technical limitation grounds.

HIGH COURT OF RAJASTHAN

Infinite Ev Solutions

Deputy Commissioner

Arun Monga and Sandeep Taneja, JJ.

D.B. Civil Writ Petition No. 4291 of 2024

JULY 7, 2026

Mohit Khandelwal and Aditya Gupta for the Petitioner. Ms. Mahi Yadav, AAG, Ms. Jaya Pathak, Utkarsh Meena and Ms. Chelsi Agarwal for the Respondent.

ORDER

Arun Monga, J. – The petitioner herein, inter alia, seeks a direction commanding respondent No.3 to condone the delay of 167 days in filing the appeal against the Order-in-Original dated 27.01.2023 (Annexure-6), passed by the Deputy Commissioner, State Tax, Circle Neem Ka Thana, Jaipur IV, whereby order for cancellation of GST registration issued against the petitioner. The appeal against the said order was filed on 10.11.2023. However, the Appellate Authority vide order dated 30.01.2024 (Annexure-1) 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. He contends that the petitioner had initially decided to discontinue its business and, therefore, did not prefer an appeal against the impugned order within the prescribed period. However, during a subsequent special GST drive, the petitioner’s firm was declared fraudulent, as a consequence of which notices were issued to its purchasers seeking reversal of Input Tax Credit (ITC) along with interest. He also contends that these subsequent developments seriously affected the petitioner’s business reputation and future livelihood, compelling the petitioner to approach the Appellate Authority to challenge the impugned order, clear its name, and protect its commercial interests. The delay is neither wilful, deliberate nor intentional, but has occurred for reasons beyond the Petitioner’s control.

2.1. Owing to these circumstances, learned counsel thus submits that the petitioner could not take necessary steps within the prescribed period. The delay is neither willful, deliberate nor intentional, but has occurred for reasons beyond the petitioner’s control.

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 Molana Construction Company v. CGST, Department 89 GSTL 353 (Raj)/2024 SCC OnLine Raj 3938, Man Singh Tanwar v. Commissioner, CGST, Department, 106 GST 181 (Raj)/D.B. CWP 14658/2024, RPC PSIPL JV v. State of Rajasthan [D.B. CWP No. 7260 of 2025, dated 2-7-2025] and RPC PSIPL JV v. State of Rajasthan [D.B. CWP No. 11794 of 2025, dated 12-8-2025], 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.R. Traders v. Union of India [2026 SCC OnLine Raj 2115]. 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 167 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 30.01.2024 is set aside. Delay of 167 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.