The Hon’ble High Court of Karnataka vide its order dated 09.11.2022 in the matter of Sri. Kolapudi Enoch Washington Proprietor of M/s INXL Digital Vs. The Additional Commissioner (GST And Central Tax) Bengaluru, The Superintendent of Central Tax Bengaluru in Writ Petition No. 21269/2022 (T-RES), ordered to restore the GST registration of the assessee when it got cancelled on account of non-filing of returns and non-payment of tax due to untimely demise of its Auditor.

The Petitioner filed the writ petition before the Hon’ble High Court praying for setting aside the Order-in-Appeal No.178/ADC-A1/ GST/2022 dated 06.10.2022 passed by Respondent No.1 in Appeal No.262/2022 GST ADC A-I (GST Appeals) and allow the appeal No. 262/2022 GST ADC A-1 (GST Appeals) filed on 16.08.2022 as prayed for and condone the delay in filing the appeal.  It was also prayed to set aside the order dated 15.03.2022 bearing Reference No. ZA290322046311Y passed by Respondent No.2 and restore GST registration of the Petitioner bearing No.29AAJPW2503M3Z5.

Petitioner’s Submissions: –

• It was submitted on the behalf of the petitioner that due to the untimely demise of his Auditor, he could not make GST payments, which led to issuance of show cause notice dated 24.02.2022 to the petitioner by the respondents.
• Further the petitioner did not receive the said show cause notice as his email account has spam filter, due to which, the petitioner was not aware about the issuance of show cause notice and hence, could not submit its reply.
• That due to aforesaid reasons, the GST registration of the petitioner was cancelled, and also the petitioner could not attend the personal hearing and respond to the notice issued by the respondents.
• It was also submitted that being aggrieved of the aforesaid order dated 15.03.2022, the petitioner preferred an appeal before the Appellate authority (Respondent No. 1), specifically submitting the above circumstances, contended that the delay in preferring the appeal deserves to be condoned by the appellate authority. However, the appellate authority by the impugned order dated 06.10.2022, dismissed the appeal refusing to condone the delay in preferring the appeal on the ground that he does not have jurisdiction to condone the delay beyond the prescribed period and the condonable period as specified under Section 107 of the CGST Act. 
• Reliance was placed on the decisions of Practice Strategic Communications vs. The Commissioner of Service Tax – ILR 2016 KAR 4493, Simplex Infrastructure Limited vs. Joint Commissioner of Central Tax – W.A.No.942/2021 dated 03.12.2021 and M/s.Himalaya Drug Company vs. Commissioner of Central Tax – W.P.No.10142/2021 dated 08.09.2022, to submit that though it may not be permissible for the appellate authority to condone the delay in preferring the appeal, this court can condone the delay exercising its powers under Article 226 of the Constitution of India.

On the other hand, it was submitted on the behalf of the respondents that there is no merit in the petition and the same is liable to be dismissed.

Held: –

• The Hon’ble Court after considering the submissions made from the both sides and facts of the case, found that it has been rightly contended on the behalf of the petitioner that the appellate authority does not have any power to condone the delay in preferring an appeal under Section 107 of the CGST Act, in the given circumstances, it is open for this Court to condone the delay by exercising its powers under Article 226 of the Constitution of India.
• It was observed by the Hon’ble Court that it is the specific contention of the petitioner that due to untimely demise of his Auditor and on account of bonafide reasons, unavoidable circumstances and sufficient cause, it was not possible for him to not only file the GST returns and make payment within the specified time but also could not prefer the appeal within the prescribed period. Therefore, it was view of the Hon’ble Court that the aforesaid explanation offered by the petitioner deserves to be accepted and by adopting justice-oriented approach, the Hon’ble Court set aside the impugned order and directed the Respondent No. 2 to restore the GST registration of the petitioner, subject to payment of all dues.

The Hon’ble High Court with the above findings, allowed the writ petition by setting aside the impugned orders dated 06.10.2022 & 15.03.2022, with the directions to the respondents to immediately restore the GST registration in favour of the petitioner without any delay.  The petitioner is also permitted to file GST returns which shall be allowed by the respondents, subject to the petitioner paying all outstanding dues to the respondents, who shall proceed further in accordance with law.

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