Department cannot challenge appellate orders it has already implemented by restoring registrations; appeals dismissed as infructuous: GSTAT Hyderabad

The Tribunal held that while the First Appellate Authority exceeded its jurisdiction in condoning delay beyond Section 107(4), the Department, having acted upon and implemented the impugned orders by restoring the taxpayers' registrations, forfeited the practical opportunity to challenge them at a belated stage.

The Goods and Services Tax Appellate Tribunal, Hyderabad Bench, has disposed of a batch of 16 departmental appeals against orders of the First Appellate Authority that had condoned delay beyond the statutory outer limit of Section 107(4) of the CGST Act in registration cancellation matters, holding that while the FAA indeed exceeded its jurisdiction, the Department's subsequent implementation of those orders by restoring the taxpayers' registrations rendered the appeals infructuous [Mandalaneni Srinivasarao v. Trishul Technologies and batch].

All the respondent-taxpayers had their registrations cancelled suo motu for persistent default in filing GSTR-3B returns for six consecutive months. They filed appeals before the FAA beyond the maximum condonable period under Section 107(4), but the FAA condoned the delay relying on judgments of the Telangana High Court rendered in exercise of its Article 226 jurisdiction. The Department challenged these orders but, in the interim, implemented them by restoring all the respondents' registrations. The taxpayers subsequently filed all pending returns and discharged their outstanding tax liabilities.

The Bench of A.P. Ravi (Judicial Member) and Duvvuri Krishna Srinivas (Technical Member) framed two issues: whether the FAA was justified in condoning the delay beyond the statutory limit, and whether the Department's appeals were maintainable after it had already acted upon the impugned orders. On the first issue, the Tribunal held unequivocally that the FAA exceeded its statutory jurisdiction. The power to condone delay under Section 107(4) is expressly circumscribed and a statutory authority, being a creature of the statute, cannot transplant the extraordinary equitable jurisdiction of a constitutional court into its own proceedings through what the Tribunal evocatively termed "judicial osmosis." The relief granted by the High Court under Article 226 in a specific case could not be construed as enlarging the FAA's jurisdiction under the statute.

However, on the second and decisive issue, the Tribunal held that the Department's conduct in implementing the impugned orders had created an anomalous and irreversible situation. If the appeals were allowed, the restored registrations would once again become liable to cancellation, potentially with retrospective effect, imperilling genuine transactions undertaken by the taxpayers and the legitimate input tax credit availed by their recipients — all without any default attributable to them. The Tribunal noted that the Department displayed serious negligence by first implementing the orders, then challenging them after the constitution of the Tribunal, describing the filing of the appeals as an afterthought incapable of yielding any effective or workable relief. The appeals were dismissed as not maintainable.

2026-juristway.com-2820-GSTAT(Hyderabad)-GST  |  GSTAT Hyderabad  |  APL/58/HYD/2026 and batch  |  18.09.2026