GST Act Has An Inbuilt Mechanism And Impliedly Excludes The Application Of The Limitation Act: Kerala High Court

The Kerala High Court has held that Section 107 of the CGST Act is an inbuilt mechanism and has impliedly excluded the application of the Limitation Act.

The bench of Justice C.S. Dias has observed that the Limitation Act will apply only if it is extended to the special statute. It is also rudimentary that the provisions of a fiscal statute have to be strictly construed and interpreted.

The assessee/petitioner is a firm engaged in direct marketing. The petitioner had a GST registration. Due to the COVID-19 pandemic, the petitioner's business got affected and was prevented from filing the returns on time. The respondents cancelled the GST registration. Even though the petitioner preferred an appeal before the Additional Commissioner Headquarters (Appeals). The appeal was rejected on the ground of delay.

The petitioner argued that it was only due to the COVID-19 pandemic that he was prevented from filing the return on time. The petitioner’s appeal was perfunctorily rejected by the respondent.

The department contended that by virtue of Section 29(2)(c) of the Central Goods and Services Tax Act, 2007, the proper officer has the power to cancel the GST registration if the registered person does not file the returns for such continuous period as may be prescribed, which at that point of time was six months. If the person is aggrieved by the cancellation, his remedy is to file an appeal under Section 107. However, the appeal has to be filed within the time frame prescribed under Section 107(4), that is, three or six months with a further period of one month. An appeal filed beyond the permitted time can only be dismissed as time-barred.

The court held that the Central Goods and Services Tax Act is a special statute and a self-contained code by itself. There is no illegality in the action of the respondent in rejecting the appeal as time-barred.

Case Title: Penuel Nexus Pvt. Ltd. Versus The Additional Commissioner Headquarters (Appeals)

Case No.: WP(C) No. 15574 Of 2023

Citation: 2023 LiveLaw (Ker) 280

Date: 13/06/2023

Counsel For Petitioner: Georgie Simon, Basil Chandy Vavacha, Tresa Augustine, Aiswarya T.S., Biju C. Abraham

Counsel For Respondent: Thushara James

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