GST Registration Restoration: When the Department Implements Its Own Adverse Orders and Then Challenges Them — GSTAT Hyderabad Rules Appeals Infructuous

Background and Overview

The GST Appellate Tribunal (GSTAT), Hyderabad Bench, recently rendered a consolidated ruling disposing of sixteen departmental appeals through a common order dated 18/09/2026 in the lead matter Mandalaneni Srinivasarao Vs Maa Engineering & Energy (Appeal No. APL/2/HYD/2026, along with APL/55, 56, 57, 58, 59, 60, 85, 144, 215, 230, 231, 232, 236, 251, and 381/HYD/2026). All sixteen appeals originated from a common factual matrix and raised an identical legal question, making consolidated adjudication appropriate.

At the core of this litigation lay a fundamental tension: the Department argued that the First Appellate Authority (FAA) had exceeded its statutory jurisdiction under Section 107 of the Central Goods and Services Tax Act, 2017 by condoning delays beyond the permissible outer limit. Yet, before these appeals could be adjudicated, the Department had already implemented those very orders by restoring the registrations of all respondents. The Tribunal's ruling navigates this contradiction with considerable analytical rigour, ultimately holding the departmental appeals infructuous and not maintainable.

Factual Matrix: How the Dispute Originated

Non-Filing of GSTR-3B Returns and Suo Motu Cancellation

Each of the respondents in this batch was a GST-registered assessee who had failed to furnish monthly GSTR-3B returns continuously for a period of six months. This persistent default attracted the consequences prescribed under Rule 21(h) of the Central Goods and Services Tax Rules, 2017 (read with Rule 22(3) thereof and Section 29(2)(c) of the CGST Act), thereby warranting suo motu cancellation of their GST registrations.

Non-Utilisation of Revocation Remedy

Following cancellation, the statutory scheme permitted the assessees to apply for revocation of cancellation within the prescribed thirty-day window, subject to discharge of all admitted tax liabilities, interest, late fees, and penalties. However, none of the respondents filed any revocation application within the period so prescribed, nor did they submit any reply to the cancellation notices within the stipulated time.

Belated Appeals Before the First Appellate Authority

Subsequently, the respondents preferred appeals before the FAA under Section 107 of the CGST Act. Critically, these appeals were filed after the expiry of the ordinary three-month period under Section 107(1) as well as beyond the additional one-month condonable period under Section 107(4) — the outer statutory ceiling being four months from the date of communication of the cancellation order.

FAA Condones Delay — Relies on Telangana High Court Decisions

Despite the apparent bar of limitation, the FAA condoned the delays and entertained the appeals on merits. In doing so, it placed primary reliance on the Telangana High Court's decision in M/s. Southern Enterprises v. State of Telangana (W.P. No. 2471 of 2023), which in turn drew upon M/s. Chenna Krishnama Charyulu Karampudi v. State of Telangana, (2023) 5 Centax 49. The FAA allowed the appeals subject to the respondents discharging their outstanding tax dues within the period stipulated in the respective orders.

Department Implements the FAA Orders — Restores Registrations

Upon the respondents discharging their dues, the Department — through the jurisdictional officers — issued orders in Form GST REG-20, formally revoking the cancellations. The respondents thereafter filed all pending returns, paid the applicable taxes, and resumed their commercial operations. As of the date of the Tribunal's order, all respondent registrations stood active and restored, and all businesses continued to operate.

Department Files Appeals Before GSTAT — Challenges the Very Orders It Implemented

Notwithstanding having implemented the FAA's orders, the Department subsequently preferred the present batch of appeals before the GSTAT, contesting the jurisdictional validity of the FAA's condonation of delay.

The Tribunal crystallised the controversy into two distinct questions:

  1. Whether the FAA was legally justified in condoning delays beyond the maximum condonable period prescribed under Section 107(4) of the CGST Act; and
  2. Whether the Department's appeals remained maintainable at all, given that the Department had already acted upon and implemented the very orders it now sought to challenge.

Submissions of the Department (Appellant)

The Department's case rested on a straightforward jurisdictional argument: