Simplified Explanation of the Judgment
In a recent decision by the Patna High Court, a petitioner challenged the cancellation of their Goods and Services Tax (GST) registration. The registration had been cancelled through an order dated July 10, 2023, preceded by a show-cause notice issued on March 2, 2023. The petitioner attempted to appeal this cancellation nearly a year later, on September 23, 2024, well beyond the legally permitted timeframe. The court dismissed the writ petition, highlighting the importance of timely action and the consequences of delay.
As per Section 107(4) of the Bihar Goods and Services Tax (BGST) Act, any aggrieved person has a right to appeal an order of cancellation of registration. However, this right is subject to a strict limitation period: the appeal must be filed within three months from the date of the cancellation order. Additionally, a grace period of one extra month is allowed for condonation of delay, provided sufficient cause is shown.
In this case, the last day to file a valid appeal was October 10, 2023. With a condonation application, the latest date permissible would have been November 10, 2023. Yet, the appeal was filed only on September 23, 2024 — more than 10 months beyond the maximum permissible period.
The High Court, led by Hon’ble the Chief Justice and Hon’ble Mr. Justice Partha Sarthy, emphasized that such inordinate delay could not be condoned under law. The petitioner, having lost his registration status, was no longer under the scrutiny of the GST Department during this entire period. As such, the court pointed out a significant risk — it was impossible to monitor whether any unregulated transactions occurred during this time.
Further, the court noted that the petitioner had not disputed the core reason for cancellation: failure to file returns for the periods required. The show-cause notice explicitly alleged non-compliance in return filing, and the petitioner failed to rebut this in the writ petition.
The judgment reflects a broader legal principle — that courts exercise their discretion in favour of those who act diligently and not those who sleep over their rights. The High Court, therefore, declined to exercise its discretionary powers in favour of the petitioner and dismissed the case.
Significance or Implication of the Judgment
This judgment serves as a reminder to businesses and GST-registered dealers in Bihar (and across India) that the timelines prescribed under the GST laws are not flexible. The legal right to appeal must be exercised within the statutory period, and any delay must be explained with strong justification — which is still subject to a legal upper limit.
The decision protects the integrity of the tax system by ensuring that unregistered dealers who fail to comply with GST laws cannot indefinitely remain outside the regulatory framework. It sends a clear message that once registration is cancelled, any appeal must be pursued promptly, or the opportunity will be permanently lost.
For the government and tax authorities, this judgment affirms their authority to enforce discipline among taxpayers, especially those who fail to file returns and evade scrutiny.
Legal Issue(s) Decided and the Court’s Decision with Reasoning
- Whether an appeal against GST registration cancellation filed after the maximum limitation period can be entertained?
- Court’s Decision: No. The appeal filed beyond the condonable period is not maintainable.
- Whether the petitioner had explained the delay or contested the grounds of cancellation?
- Court’s Decision: No. The petitioner neither justified the delay nor contested the reason for cancellation (non-filing of returns).
- Whether the court can exercise discretion to grant relief despite statutory bar?
- Court’s Decision: No. The court emphasized that the law does not support indolence, and dismissed the petition.
Case Title
M/s Vijay Pandey vs. The State of Bihar & Ors.
Case Number
Civil Writ Jurisdiction Case No. 19531 of 2024
Coram and Names of Judges
Hon’ble the Chief Justice K. Vinod Chandran
Hon’ble Mr. Justice Partha Sarthy
Names of Advocates and who they appeared for
Mr. Nitesh Kumar, Advocate — for the petitioner
Mr. Subodh Kumar, Advocate — for the petitioner
Mr. Vivek Prasad, Government Pleader-7 — for the respondents
Link to Judgment
2128a18d-2bfb-44fd-bc2b-6409d81353f3.pdf
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