M/S S. Nabad Ali Mustak Ahmed vs Union Of India (2025:Rj-Jd:49328-Db)

M/s S. Nabad Ali Mustak Ahmed, Near Home Signal, Makrana, Nagaur - 341505, Rajasthan, Through Its Proprietor Shri Nabab Ali S/o Shri Mustak Ahmed Abed 75 Years, Approx R/o Near Aaysha Masjid Ward No. 18, Makrana, Nagaur - 341505, Rajasthan. ----Petitioner Versus 1. Union Of India, Through Union Secretary, Department Of Revenue, Ministry Of Finance, North Block, New Delhi- 110001. 2. State Of Rajasthan, Through Its Finance Secretary, Finance Department, 1St Floor, Main Building, Government Secretariat, Janpath, Jaipur - 302005. 3. Chief Commissioner, State Tax, Commercial Taxes Department (Rajasthan Goods And Service Tax Department), Kar Bhawan, Ambedkar Circle, Bhawanisingh Road, Jaipur. 4. Assistant Commissioner, State Tax, Ward-I, Circle - Makrana, Commercial Taxes Department, Makrana, Rajasthan. 5. Additional Commissioner, Appellate Authority, Commercial Taxes Department, Ajmer, Rajasthan. ----Respondents

For Petitioner(s) : Mr. Akshay Sharma (through VC). Mr. Nishant Gaba For Respondent(s) : Mr. Mahaveer Bishnoi, AAG with Mr. Harsh Vardhan Singh

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

HON'BLE MR. JUSTICE ANUROOP SINGHI Order 04/11/2025

1. The present D.B. Civil Writ Petition has been preferred by the

petitioner, inter alia, claiming the following reliefs:

"It is, therefore, most humbly prayed that this Hon'ble Court would be pleased to accept and allow this writ petition and

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pleased to issue appropriate writ/order/direction to the Respondent-

(i) To declare Section 107(1) and Section 107(4) of the CGST and RGST Acts as unconstitutional;

(ii) Alternatively, the Hon'ble Court may read down Section 107(4) so as to ensure express application of the Limitation Act and ensure condonation of delay beyond the period of 30 days on sufficient grounds/reasons;

(iii) To quash and set aside the show cause notice dated 18.10.2023 (Annexure-5) and order dated 06.12.2023 (Annexure-6) for cancellation of registration passed by Respondent No. 4 and GSTIN of the petitioner-firm, may kindly be restored enabling the petitioner to continue to its business;

(iv) To quash and set aside the order dated 08.12.2024 and summary thereof in Form GST APL-04 dated 08.12.2024 (Annexure-8) passed by Respondent No. 5 rejecting the appeal filed by the petitioner against the cancellation order dated 06.12.2024;

(v) To declare the condition and restriction of the time limit for preferring an appeal beyond the period of three months with a grace period of only one month, as prescribed under Section 107 of the CGST/RGST Acts, as ultra vires and against the fundamental rights enshrined under Articles 19, 21 and 265 of the Constitution of India;

(vi) To issue a writ, order or direction to the Appellate Authority to hear the matter on merits treating the appeal as having been filed within the period of limitation;

(vii) To pass any other order that this Hon'ble Court may deem fit and proper in the present facts and circumstances of the case so as to ensure the ends of justice."

2. At the outset, it is noted that during the course of

proceedings, learned counsel for the petitioner has expressly given

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up the challenge to the validity of Section 107(1) and Section

107(4) of the CGST/RGST Acts. Accordingly, the adjudication of

the present writ petition shall be confined to the remaining reliefs

and shall be made accordingly.

3. Brief facts of the present case are that the petitioner is a

proprietorship firm engaged in the business of manufacturing

marble slabs and is registered under the RGST/CGST Acts bearing

GSTIN 08ADEPA00813E1ZC. The petitioner had been regularly

filing its returns up to July 2023. According to the petitioner, due

to his medical condition from August 2023 onwards, he could not

supervise the business operations, resulting in non-filing of GSTR-

1 and GSTR-3B for subsequent months.

3.1. On 18.10.2023, Respondent No. 4 issued a Show Cause

Notice in Form GST REG-17 proposing cancellation of the

petitioner's GST registration on the ground of non-filing of GSTR-

3B. The petitioner asserts that the said notice was not served in

any of the modes under Section 169 of the RGST/CGST Acts

except mere uploading on the GST Portal and that the notice was

vague as it did not specify the continuous six-month period of

default required under Section 29(2)(c).

3.2. As no reply was submitted to the Show Cause Notice,

Respondent No. 4 passed an order dated 06.12.2023 cancelling

the petitioner's GST registration with retrospective effect from

01.09.2023. The petitioner claims that he became aware of the

cancellation only upon contacting his tax consultant after

recovering from illness.

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3.3. Thereafter, the petitioner filed an appeal under Section 107

of the RGST/CGST Acts on 24.09.2024. The Appellate Authority

(Respondent No. 5), vide order dated 18.12.2024, dismissed the

appeal as being time-barred beyond the maximum condonable

period prescribed under Section 107(4).

3.4. Aggrieved, the petitioner filed the present writ petition

challenging the Show Cause Notice, the cancellation order and the

appellate order, as also assailing the constitutional validity of

Section 107(1) and Section 107(4) of the RGST/CGST Acts;

however, during the course of proceedings, learned counsel for the

petitioner expressly gave up the challenge to the validity of the

said provisions.

4. Learned counsel for the petitioner submitted that the

impugned order dated 06.12.2023 cancelling the petitioner's GST

registration is wholly arbitrary, perverse and without jurisdiction.

It was urged that the Show Cause Notice dated 18.10.2023 itself

was incompetent, as the pre-condition under Section 29(2)(c) of

the RGST/CGST Acts read with Rule 21(h) namely non-filing of

returns under Section 39(1) for a continuous period of six months

was not satisfied. The petitioner had duly furnished GSTR-3B

returns up to July 2023 and, therefore, on the date of issuance of

the SCN, no six-month continuous default existed. Consequently,

initiation of cancellation proceedings was beyond jurisdiction.

4.1. It was further submitted that the Show Cause Notice was

vague and cryptic, as it did not specify the period of alleged

default nor disclose any foundation for invoking Section 29(2)(c).

Such a defective notice deprived the petitioner of meaningful

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opportunity to respond. Learned counsel submitted that the show

cause notice and the cancellation order were never served upon

the petitioner in any mode contemplated under Section 169 of the

Act and had merely been uploaded on the GST Portal. In the

petitioner's medical condition, such portal-only communication did

not constitute effective service, and the entire proceedings stood

vitiated for want of due notice and violation of natural justice.

4.2. Learned counsel contended that the cancellation order was

further vitiated on account of retrospective effect from

01.09.2023, although suspension was ordered only on

18.10.2023. No reasons were assigned for retrospective

cancellation, rendering the action arbitrary and unsupported by

any statutory justification. It was also urged that the order dated

06.12.2023 was passed without affording any opportunity of

personal hearing as mandated under Section 75(4) of the Act.

4.3. Assailing the appellate order dated 18.12.2024, learned

counsel submitted that the appeal was dismissed on a hyper-

technical ground of limitation without considering the petitioner's

application for condonation of delay. It was argued that the delay

occurred solely due to the petitioner's medical ailment,

Lumbosacral Radiculopathy, which incapacitated him from

attending business affairs. Once his condition improved, the

appeal was filed at the earliest. The appellate authority failed to

consider the bona fide explanation supported by medical

documents and rejected the appeal mechanically, without

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adverting to the circumstances or the severe civil consequences

involved.

4.4. It was contended that rejection of the appeal on the ground

of limitation had the effect of depriving the petitioner of the right

to carry on business and livelihood protected under Articles 19(1)

(g) and 21 of the Constitution. Reliance was placed upon decisions

of this Court in Poonamchand Saran v. Union of India, Kanika

Vishnoi v. Union of India (D.B. Civil Writ Petition No.

14521/2022 Order dated 29.09.2022), as well as on the

judgment of the Madras High Court in Tvl. Suguna Cutpiece

Center vs. Appellate Deputy Commissioner (St.) (GST),

Salem 2022 (W.P. Nos. 25048, 25877 and 14508 of 2021

order dated 31.01.2022), wherein delays in filing appeals

against GST cancellation orders were condoned and registration

was restored to avoid deprivation of livelihood.

4.5. Learned counsel further submitted that this Court, in

exercise of writ jurisdiction, is not bound by the outer limit

prescribed in Section 107(4) and can direct the appellate authority

to consider the appeal on merits in the interest of justice,

particularly where rigid application of limitation would result in

civil death of an ongoing business. Reliance was placed on the

judgment of this Court in Man Singh Tanwar v. Commissioner,

CGST (D.B. Civil Writ Petition No.14658 of 2024 decided on

09.09.2024), where delay was condoned due to illness in the

family, demonstrating that genuine circumstances ought to receive

liberal consideration.

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4.6. It was urged that the petitioner's situation stands on even

firmer footing, as the delay was caused by his own medical

incapacity. The petitioner, being a genuine businessman

continuously conducting lawful activity, should not suffer

irreversible consequences due to technicalities. Learned counsel

submitted that the actions of the respondents have caused grave

and irreparable injury and that restoration of registration is

necessary not only to enable continuation of business but also to

ensure future tax compliance and revenue to the State.

4.7. On these submissions, learned counsel prayed that the

cancellation orders as well as the appellate order be quashed and

the petitioner's GST registration be restored, or in the alternative,

the appellate authority be directed to decide the appeal on merits

after condoning the delay.

5. Learned Additional Advocate General appearing for the

respondents submitted that the writ petition is devoid of merit and

liable to be dismissed. It was submitted that the petitioner was

issued a Show Cause Notice on 18.10.2023 under Rule 22(1) read

with Rule 21A(2A) of the RGST/CGST Rules for non-filing of GSTR-

3B for the month of August 2023. Despite due service of the

notice in accordance with Section 169 of the Act, the petitioner

failed to submit any reply or to file the overdue return.

Consequently, the competent authority was justified in cancelling

the petitioner's registration.

5.1. It was further submitted that the petitioner's plea of medical

incapacity is an afterthought and contrary to the records, which

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show that the petitioner-firm continued business operations during

the relevant period. The cancellation order was passed only after

the petitioner failed to respond to the show cause notice despite

adequate opportunity.

5.2. Learned Additional Advocate General contended that even

the appellate remedy under Section 107 was not availed within

time. The petitioner admittedly filed the appeal on 24.09.2024,

long after expiry of the statutory period of three months

prescribed under Section 107(1) and even beyond the further

condonable period of one month under Section 107(4). It was

urged that the Appellate Authority rightly dismissed the appeal as

time-barred, as it had no jurisdiction to entertain an appeal filed

beyond the statutory outer limit.

5.3. It was argued that the petitioner cannot now take advantage

of his own inaction and seek to reopen proceedings by alleging

violation of natural justice, especially when the record establishes

valid service of notice and deliberate non-participation in the

proceedings. The petitioner was afforded more than sufficient time

to respond to the notice as well as to prefer an appeal, yet no

action was taken within the statutory period.

5.4. Learned Additional Advocate General further submitted that

the statutory framework under Section 107 is consistent with

several fiscal enactments, such as Section 35 of the Central Excise

Act, 1944 and Section 128 of the Customs Act, 1962, which also

provide a fixed period for filing an appeal with a limited

condonable extension, beyond which delay cannot be condoned

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and Section 5 of the Limitation Act stands excluded. The scheme

of Section 107 is in consonance with these settled legislative

patterns.

5.5. It was urged that the right of appeal is not an inherent or

fundamental right but a statutory creation, and the legislature is

competent to prescribe conditions, including rigid timelines. When

the statute expressly excludes condonation beyond one month,

neither the Appellate Authority nor this Court, while exercising

judicial review, can rewrite the legislative mandate or enlarge the

limitation period.

5.6. Learned Additional Advocate General submitted that the

challenge to the effectiveness of service under Section 169 is

unfounded, as the show cause notice, cancellation order and all

communications were duly uploaded on the common portal and

also sent to the registered e-mail ID and mobile number. The

petitioner has not shown any compelling cause for non-compliance

or for delay in filing the appeal.

5.7. It was also submitted that the petitioner's abandonment of

the vires challenge further narrows the scope of the petition, and

the only surviving issue relates to cancellation on account of

admitted non-filing of returns and belated appeal, both of which

stand concluded against the petitioner under the statutory

mechanism.

5.8. On these submissions, learned Additional Advocate General

prayed that the writ petition be dismissed with costs.

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6. Heard learned counsel for the petitioner as well as learned

Additional Advocate General appearing for the respondents and

perused the material available on record.

7. This Court observes that, in view of paragraph 2 above, the

scope of the present writ petition stands confined to the challenge

to the show cause notice dated 18.10.2023, the cancellation order

dated 06.12.2023, the appellate order dated 18.12.2024 and the

consequential prayer for restoration of the petitioner's GST

registration and/or consideration of his statutory appeal on merits.

The challenge to the vires of Section 107(1) and 107(4) of the

CGST/RGST Acts does not survive for adjudication.

8. This Court observes that the cancellation of GST registration

entails serious civil consequences, inasmuch as it disables a

registered person from carrying on taxable business in the

ordinary course and, in practical terms, affects the right to

livelihood of the assessee and those dependent on such business

activity. In such circumstances, the approach of the authorities,

particularly while dealing with appeals against cancellation orders,

is expected to be fair, reasonable and not unduly technical.

8.1. At this stage, reference may be made to the judgment of this

Court in, Pooja Construction Company v. Union of India &

Ors., (D.B. Civil Writ Petition No. 13263/2025 decided on

08.10.2025), wherein the Court, in identical circumstances

involving dismissal of appeal solely on the ground of limitation,

held as under:

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"7. It is a matter of record that GST registration of the petitioner has been cancelled with effect from 14.03.2024 which is virtually a civil death thereby bringing the business operations of the petitioner at a stand still. As per the petitioner, its accountant, who was entrusted with the responsibility to file the returns and to ensure all the legal and statutory compliances, has failed to perform his duty and on account of failure to file returns continuously for 6 months, the GST registration of the petitioner was cancelled. The reasons mentioned in the petition for non-compliance of the relevant provisions of the Act within the prescribed time, in the considered opinion of this Court, appears to be genuine.

8. This Court in the above relied upon judgments while allowing the writ petitions, have issued directions to entertain the appeal on merits.

9. For the foregoing reasons and taking benefits of the order passed by the Coordinate Bench of this Court, we allow the present writ petition and accordingly, set aside the order dated 26.05.2025 (Annex.5) passed by the appellate authority. The appellate authority is directed to consider and decide the appeal of the petitioner on its own merits, in accordance with law, subject to the petitioner firm depositing late fees, penalty and other statutory deposits for entertaining the appeal, as admissible."

8.2. The ratio of the aforesaid judgment squarely applies to the

facts of the present case, where cancellation has resulted in

cessation of business activity and the statutory appeal has been

rejected solely on limitation without consideration of the

explanation tendered by the petitioner.

9. This Court observes that the Appellate Authority, while

dismissing the petitioner's appeal as time-barred, has proceeded

solely on computation of limitation under Section 107(1) and

107(4) of the CGST/RGST Acts and has not adverted to, much less

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dealt with, the petitioner's explanation for delay, the nature of the

ailment pleaded, or the grave consequences of non-condonation in

the facts of the case. The impugned appellate order is, thus, ex

facie cryptic and non-speaking on these material aspects.

10. This Court finds that, although the Appellate Authority is

bound by the outer limit prescribed in Section 107(4) and cannot,

in exercise of its own powers, condone delay beyond the statutory

cap, the constitutional jurisdiction of this Court under Articles 226

and 227 is of a different and higher character. In an appropriate

case, where the explanation for delay is plausible and the

consequences of non-condonation are disproportionate and harsh,

this Court is not precluded from issuing directions so as to ensure

that the matter is considered on merits, notwithstanding the

statutory bar, particularly when grave prejudice to livelihood and

business is demonstrated.

11. This Court observes that the petitioner has, on oath, asserted

that he came to know of the cancellation of registration only upon

contacting his tax consultant after recovery from illness and that

the appeal was then filed without further delay on 24.09.2024. It

is also not in dispute that the delay is of a finite and determinable

period and that the petitioner is otherwise willing to comply with

all statutory obligations, including filing of pending returns and

payment of dues, if any, determined in accordance with law.

12. This Court finds that, in the facts peculiar to the present case,

the delay in filing the appeal stands sufficiently explained on a

prima facie basis by reference to the petitioner's medical condition

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and subsequent steps taken upon acquiring knowledge of

cancellation. The respondents have not pointed out any serious

prejudice to revenue that would ensue merely by permitting the

appeal to be heard on merits. On the contrary, continuation of

business and restoration of registration, subject to final outcome,

would facilitate future tax compliance and collection.

13. This Court observes that both sides have raised rival

contentions on the legality of the Show Cause Notice dated

18.10.2023, the alleged non-compliance with Section 169 as

regards service, the validity of retrospective cancellation from

01.09.2023, and the alleged violation of Section 75(4) and

principles of natural justice. These are issues which are integrally

connected with the merits of the cancellation proceedings and are

best examined by the statutory Appellate Authority in the first

instance, upon a full and fair hearing to both parties.

14. This Court finds that it would neither be appropriate nor

necessary, in the exercise of writ jurisdiction, to conclusively

adjudicate upon the merits of the cancellation and the show cause

notice at this stage, when the statutory appeal has been rejected

solely on limitation and has not yet been considered on merits.

Interference in writ jurisdiction is, therefore, warranted primarily

to the extent of correcting the denial of an effective appellate

remedy, rather than substituting this Court's view on factual and

legal issues that lie within the province of the Appellate Authority.

15. This Court observes that, in similar matters concerning

cancellation of GST registrations, this Court and other High Courts

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have, in the interest of justice and to avoid civil death of genuine

businesses, directed consideration of delayed appeals on merits by

excluding the bar of limitation, where the explanation for delay

and the hardship occasioned thereby justified such an equitable

course. The facts of the present case, involving medical incapacity

pleaded by the proprietor of a running firm, justify adoption of a

similar remedial approach.

16. This Court finds, therefore, that the refusal of the Appellate

Authority to entertain the petitioner's appeal solely on the ground

of limitation, without examining the explanation for delay and

without affording the petitioner an opportunity of contesting the

merits of cancellation, has resulted in denial of a substantive

statutory remedy and, in turn, threatens to irreversibly affect the

petitioner's right to carry on business and livelihood. In the totality

of circumstances, this Court is persuaded to exercise its writ

jurisdiction to reopen the appellate remedy.

17. This Court observes that the ends of justice would be

adequately met if the appellate order dated 18.12.2024 is set

aside and the appeal filed by the petitioner is restored to the file

of the Appellate Authority, with a specific direction that the appeal

shall be heard and decided on merits, without being dismissed on

the ground of limitation and without being influenced by the

earlier order of dismissal. All contentions of both parties on the

merits of the Show Cause Notice, the cancellation order and the

issue of service, including reliance on case-law, shall remain open

for consideration by the Appellate Authority.

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18. This Court finds it appropriate to clarify that this Court has not

expressed any concluded opinion on the legality or correctness of

the Show Cause Notice dated 18.10.2023 or the cancellation order

dated 06.12.2023. Any observations herein are only for the limited

purpose of examining the justification for reopening the appellate

remedy and shall not prejudice the adjudication by the Appellate

Authority, which shall decide the matter independently in

accordance with law.

19. This Court observes that the Appellate Authority shall afford

reasonable opportunity of hearing to both sides, permit the

petitioner to place all relevant documents and submissions, and

thereafter pass a reasoned order dealing with the rival

contentions, preferably within a stipulated period to avoid further

uncertainty for either party.

20. In view of the aforesaid discussion and for the reasons

recorded hereinabove, this Court deems it appropriate to exercise

its writ jurisdiction to reopen the petitioner's statutory appellate

remedy. Accordingly, the order dated 18.12.2024 passed by the

Appellate Authority (Respondent No. 5) in Form GST APL-04 is

hereby quashed and set aside.

21. The appeal filed by the petitioner on 24.09.2024 under Section

107 of the RGST/CGST Acts shall stand restored to the file of the

Appellate Authority, to be heard and decided on merits, without

being dismissed on the ground of limitation and without being

influenced by the earlier order of dismissal.

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22. The Appellate Authority shall afford due opportunity of hearing

to both parties, permit filing of all relevant documents/material,

and shall pass a reasoned and speaking order dealing with all

contentions relating to the Show Cause Notice dated 18.10.2023,

cancellation order dated 06.12.2023, and all ancillary issues.

23. The writ petition is disposed of in the above terms.

(ANUROOP SINGHI),J (DR. PUSHPENDRA SINGH BHATI),J

51-SKant/-

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