Restored GST Registrations Render Departmental Appeals Infructuous: Hyderabad GSTAT on Section 107 Limitation

Background and Overview

The Hyderabad Bench of the GST Appellate Tribunal (GSTAT), in a consolidated ruling disposing of sixteen departmental appeals, addressed two critical legal questions: first, whether the First Appellate Authority (FAA) possessed the power to condone delays in filing appeals beyond the outer statutory limit prescribed under Section 107(4) of the Central Goods and Services Tax Act, 2017; and second, whether departmental appeals remain maintainable after the Department itself has acted upon and implemented the very orders it subsequently seeks to challenge.

The consolidated judgment was delivered in Mandalaneni Srinivasarao Vs Sri Sai Traders (Hyderabad GSTAT), Appeal Number APL/60/HYD/2026, dated 18/09/2026, along with fifteen connected appeals.

Facts of the Case

GST Registration Cancellations

All respondents in this batch of appeals were registered assessees under the CGST Act who had failed to file their monthly GSTR-3B returns for a continuous period of six months. This persistent non-compliance triggered the provisions of Rule 21(h) of the Central Goods and Services Tax Rules, 2017, read with Rule 22(3) and Section 29(2)(c) of the Act, resulting in suo motu cancellation of their GST registrations.

Failure to Apply for Revocation

Under the statutory framework, each assessee was required to file an application for revocation of the cancellation order within the prescribed thirty-day window, after clearing all outstanding tax dues, interest, late fee, and penalty. None of the respondents availed of this remedy within the prescribed time.

Appeals Filed Beyond Statutory Period

The respondents subsequently approached the FAA by way of appeals under Section 107 of the CGST Act. However, these appeals were filed not merely after the ordinary three-month period prescribed under Section 107(1), but also beyond the additional one-month condonable window available under Section 107(4). The FAA, relying on two Telangana High Court decisions — M/s. Southern Enterprises v. State of Telangana, W.P. No. 2471 of 2023 and M/s. Chenna Krishnama Charyulu Karampudi v. State of Telangana, (2023) 5 Centax 49 — condoned the delays and allowed the appeals, subject to payment of outstanding dues.

Department Implements the Orders — Then Challenges Them

Upon the respondents discharging their tax liabilities in compliance with the FAA's directions, the Department revoked the cancellation of all registrations, enabling the assessees to resume business operations. The registrations remained active at the time of the Tribunal proceedings. The Department then filed the present batch of sixteen departmental appeals before the Hyderabad GSTAT, contesting the jurisdictional competence of the FAA to condone delays beyond Section 107(4).

The Tribunal identified and examined two distinct issues:

  1. Whether the FAA was legally competent to condone delays in filing appeals beyond the maximum period permissible under Section 107(4) of the CGST Act.
  2. Whether departmental appeals challenging the FAA's orders remain maintainable, given that the Department had already implemented those orders by restoring the respondents' GST registrations.

Preliminary Issue: Whether Proceedings Should Be Deferred Pending Special Bench

Request for Adjournment

One respondent's counsel, appearing for M/s. MAA Engineering & Energy and M/s. A. Srinivas Kirana and General Stores, urged the Tribunal to keep the proceedings in abeyance, pointing out that the Principal Bench had constituted a Special Bench to adjudicate upon the question of maintainability of appeals filed before the FAA under Section 107 after expiry of the outer time limit under Section 107(4).

Tribunal's Reasoning for Declining the Request

The Tribunal carefully delineated the distinction between the two sets of matters. The appeals pending before the Special Bench concern situations where assessees had sought condonation of delay before the FAA and been rejected — making the question of limitation directly alive and unresolved against the assessee. In the present batch, however, the FAA had already exercised its discretion in favour of the respondents, and it was the Department challenging that exercise of jurisdiction.

The procedural posture, nature of the impugned orders, and relief sought were materially distinct in both sets. The Tribunal held that the mere existence of a broadly related legal question before the Special Bench could not operate as a bar to proceedings that were ripe for adjudication on their own merits. Keeping the matters in abeyance would prolong uncertainty without serving any concrete institutional purpose. Accordingly, the request for deferral was declined, and the batch was taken up for final disposal.

Issue I: Did the FAA Exceed Its Jurisdiction Under Section 107(4)?

Department's Submissions

The Department's case was straightforward: Section 107(1) prescribes a three-month period for filing an appeal from the date of communication of the impugned order, while Section 107(4) authorises the FAA to condone delay for a further period of one month only, upon satisfaction that sufficient cause existed. The aggregate outer limit is thus four months. The respondents' appeals were filed beyond this limit, and the FAA had no jurisdiction to entertain them.