Article 21 - Constitution of India
Case Title | Durga Rama Patnaik vs Additional Commissioner of GST (Appeals) |
Court | Orissa High Court |
Honorable judges | MR. Justice Jaswat Singh and MR. Justice Murahari Sri Raman |
Citation | W.P (C) No. 7728/2022 2022 (10) GSTPanacea 198 HC Orissa |
Judgement Date | 13-10-2022 |
Article 21 - Constitution of India
Can Non-Restoration of GST Registration be considered a violation of the “Right to Livelihood” [Article 21 – Constitution of India]?
Can rejection of Appeal for restoration of registration violation of the “Right to carry on Business” [Article 19(1)(g) – Constitution]?
GST Registration of the Petitioner was canceled U/s 29 (2) (c) as there was non-filing of returns for a consecutive period of six months.
Instead of seeking revocation of cancellation of registration U/s 30 before the proper officer, appeal U/s 107 was preferred.
This Appeal was filed with a delay of 660 days.
The appeal was REJECTED on the grounds of limitation.
Against this rejection, he approached Orissa High Court through Writ Petition (Certiorari).
the petitioner submitted that the Appellate Authority was not powerless to grant the opportunity to the petitioner to deposit tax, and interest coupled with the penalty and late fee and relegate him to approach the Registering Authority U/s 30 by condoning the delay, as has been done by this Court in very many cases
The court observed that refusing to decide the challenge against the order of cancellation of registration on the ground of limitation would be a counterproductive approach as the taxable person is deprived to carry on business in the sense that no tax invoice can be raised
Therefore, the opposite parties are required to take a pragmatic view of the matter.
In the event the GST Registration number is not restored, the petitioner would not be in a position to raise a bill, it would affect his right
it would affect his right to livelihood (Article 21 of the Constitution of India) as also right to carry on business [Article 19(1)(g)].
The court placed its reliance upon the decision in the matter of Tvl. Suguna Cutpiece Center – Madras High Court
High Court permitted the petitioner to file returns for the period prior to the cancellation of registration, if such returns have not already been filed, together with tax defaulted and late fee, within a period of sixty days.
Such payment of tax/interest/penalty/ fine/fee etc. shall not be allowed to be made or adjusted from and out of any Input Tax Credit which may be lying unutilized.
On payment of tax, interest, penalty, and late fee, if any, and uploading of returns, the petitioner is at liberty to file the application for revocation of cancellation of registration within a period of 7 days along with the petition for condonation of delay.
Murahari Sri Raman, J.—
The petitioner, proprietorship concern of Sri Durga Raman Patnaik with legal name and trade name “DURGA RAMAN PATNAIK” registered under the provisions of the Central Goods and Services Tax Act, 2017 (referred to as “CGST Act”), while assailing the Order dated 07.10.2021 passed in Appeal bearing No.228/BBSR-GST/APPEAL/2021 by the Additional Commissioner, GST (Appeals) (for brevity referred to as “Appellate Authority”) vide Annexure-1, questioned the propriety of Order dated 21.08.2019 of Superintendent, Berhampur-I Range, Berhampur Division (for short, “Registering Authority”), who, in exercise of power under Section 29(2)(c) of the said Act, has cancelled the registration (Annexure-4).
2. Fact leading the petitioner to approach this Court to beseech invocation of extraordinary jurisdiction under the provisions of Article 226/227 of the Constitution of India, 1950, is that by referring to reply dated 31.08.2019 submitted by the petitioner in pursuance of terms of Show Cause Notice dated 21.08.2019, the Superintendent of Ganjam-I Circle in Berhampur I Range without assigning any reason proceeded to cancel the registration, GSTIN: 21ALPPP8146E2ZY on 15.10.2019 invoking provisions of Section 29(2)(c) of the CGST Act with effect from 15.10.2019 inasmuch as there was non-filing of returns for consecutive period of six months.
2.1. Instead of seeking revocation of cancellation of registration under Section 30 of the CGST Act before the proper officer, assailing aforementioned order dated 15.10.2019, the petitioner preferred appeal under Section 107 of the CGST Act on 05.08.2021 with a delay of around 660 days which came to be rejected on 07.10.2021.
2.2. It is submitted by the counsel for the petitioner that while the Appellate Authority made an observation in his Appellate Order that application for revocation of cancellation of registration as envisaged in Section 30 of the CGST Act read with Rule 23 of the Central Goods and Services Tax Rules, 2017 (abbreviated as, “CGST Rules”) being not filed within prescribed period, instead of rejecting the appeal on the ground of limitation by taking pedantic view, should have appreciated genuine difficulty faced by not only the petitioner but also other similarly placed suppliers and recipients and relegated him for availing the benefit of said remedial recourse of revocation of order of cancellation of registration under said provision as there is no outer limit provided under afore-mentioned provisions and the delay for sufficient reason being shown can be condoned.
2.3. Urging that the Appellate Authority ought to have shown pragmatic approach by taking a lenient view, referring to Notification No.19/2021— Central Tax, dated 01.06.2021, issued by Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs, it has been submitted that it has provided relief to the taxpayers by reducing/waiving late fee for non-furnishing Form GSTR-3B for the tax periods from July, 2017 to April, 2021, if the returns for these tax periods are furnished between 01.06.2021 to 31.08.2021. However, by virtue of Notification No. 33/2021— Central Tax, dated 29.08.2021, the last date to avail benefit of the amnesty scheme was extended from 31.08.2021 to 30.11.2021.
2.4. Based on the multiple representations received, Government by issue of Notification No. 34/2021— Central Tax [GSR No.600(E)], dated 29.08.2021 have also extended the timelines forfiling of application for revocation of cancellation of registration to 30.09.2021, where the due date of filing of application for revocation of cancellation of registration falls between 01.03.2020 to 31.08.2021. The extension was made applicable only in those cases where registrations were cancelled under clause (b) or clause (c) of sub-section (2) of Section 29 of the CGST Act.
2.5. Such an extension by way of amnesty scheme and extension of time limit for filing of application for revocation of cancellation of registration was promulgated as a benevolent gesture of the Government keeping in mind on the advent of GST regime with effect from 01.07.2017 adverse situations were faced by suppliers/recipients/taxpayers especially small taxpayers. Due to lack of awareness regarding nuances of “strict compliance” of new taxation policy, they could not file their returns in time. Such difficulties were multiplied by outbreak of Severe Acute. Respiratory Syndrome-associated corona virus (SARS-CoV) leading to COVID-19 pandemic. Consequently, such situation was declared force majeure which led to promulgation of Section 168A by way of the CGST (Amendment) Act, 2020 granting power to the Government to extend time limit in special circumstances.
2.6. It is, therefore, argued by the counsel for the petitioner that the Appellate Authority was not powerless to grant opportunity to the petitioner to deposit tax, interest coupled with penalty and late fee and relegate him to approach the Registering Authority under Section 30 of the CGST Act by condoning the delay as has been done by this Court in very many cases, namely in the case of Nirmani Engineers and Constructions Pvt. Ltd. Vrs. The Commissioner of CT&GST, Odisha and Others, W.P.(C) No.15934 of 2021, wherein vide Order dated 05.05.2021, this Court has observed as follows:
“2. Mr. Sunil Mishra, learned Additional Standing Counsel for Opposite Parties appearing on an advance notice states that as long as delay in filing the appeal is condoned, and provided the Petitioner complies with all the requirements of paying the taxes due, the 3B Return Form filed by the Petitioner will be accepted by the Opposite Parties.
3. In that view of the matter, the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes due and complying with other formalities, the GST return filed by
the Petitioner, provided it is filed on or before 5th July, 2021, will be accepted by the Opposite Parties.”
2.7. It is stated by the petitioner that in exercise of power under Section 128 of the CGST Act, the amount of late fee payable by registered person for failure to furnish return in Form GSTR-3B for the month of July, 2017 onwards by the due date under Section 47 has been waived by virtue of Notification No.76/2018— Central Tax, dated 31.12.2018 issued by the Government of India in Ministry of Finance (Department of Revenue), whereby ninth proviso has been inserted by way of amendment vide Notification No.19/2021— Central Tax, dated 01.06.2021, which is to the following effect: “Provided also that for the registered persons who failed to furnish the return in Form GSTR-3B for the months /quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1st day of June, 2021 to the 31st day of August, 2021, the total amount of late fee under Section 47 of the said Act, shall stand waived which is in excess of five hundred rupees:”
2.8. Relying on said proviso, it is, therefore, asserted that had the registration been live, the petitioner would have the occasion to furnish returns between the period from 01.06.2021 to 31.08.2021 in Form GSTR-3B for the months/quarter of July, 2017 to April, 2021.
2.9. Under such premise, the counsel for the petitioner praying for setting aside the Appellate Order (Annexure-1), would submit that given a chance, besides payment of tax, interest and penalty with late fee, all required returns can be furnished. Upon such compliance, the petitioner can be directed to make application under Section 30 for revocation of cancellation of registration.
3. It is stated at the Bar that many cases of this nature has beenrejected by the Appellate Authority by passing a common order, as a consequence of which taxpayers even though are ready to deposit tax, interest and penalty with late fee and also furnish return(s), they are deprived of availing such advantage as is bestowed in the aforementioned notifications. Since the Bar sought to address the issue, this Court asked Sri Rudra Prasad Kar, Advocate to render assistance in this regard.
3.1. Mr. Rudra Prasad Kar, learned Advocate has placed the following suggestions by way of short note dated 25.08.2022: “GST law being, a New Act, assessees are facing the difficulties in switching to procedural compliance electronically through internet on the GST Web-Portal. Considering the hardship faced by the assessees and more specifically due to COVID-19 pandemic, various amnesty schemes were introduced by the Government of India to ease the technical and procedural complicacies faced by the assessees. The provisions of the GST enactments and the rules made thereunder, read with various clarifications issued by the Central Government, pursuant to the decision of the GST Council and the Notification issued thereunder, also makes it clear that the intention is only to facilitate business and not to debar the assessees from coming back into GST fold. The purpose of GST registration is only to ensure that just taxes get collected on supplies of goods or services or both and is paid to the exchequer. Keeping these petitioners outside the bounds of the GST regime is a selfdefeating move. It will be in the interest of the State to allow restoration of the Registration Certificate and facilitate business to grow.
The provisions of the GST enactments cannot be interpreted so as to deny the right to carry on Trade and Commerce to a citizen. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of the defect in the scheme of the GST enactments. The right to carry on trade or profession also cannot be curtailed. Only reasonable restrictions, can be imposed.
To deny such rights would militate against the rights under Article 14, read with Article 19(1)(g) and Article 21 of the Constitution of India. Recognizing the difficulties, the Central Board of Indirect Taxes and Customs (CBIC) extended the time limit for filing application for revocation of cancellation of registration for all the orders passed on or before 12.06.2020 was granted time till 31.08.2020from which date the period of limitation for revocation of registration certificate would be counted. As the application filed by the writ-applicants for revocation of cancellation of registration was looked into by a quasi judicial authority, the order of the Hon’ble Supreme Court extending the period of limitation in view of the COVID-19 pandemic would apply and in such circumstances, the limitation in accordance with the order passed by the Central Board of Indirect Taxes and Customs would also stand extended. In view of the above and the various amnesty scheme notified by the Department, the Court may consider passing an order in consonance with the order of Hon’ble Supreme Court in Union of India & Another Vrs. FILCO Trade Centre Pvt. Ltd. & Another, SLP(C) No.31709-32710/2018, dated 22.07.2022.
The following are the humble suggestions:
1. The Hon’ble Court may consider allowing ‘three’ months time to assessees/the registered persons, whose registration have been cancelled under clause (b) or clause (c) of subsection (2) of Section 29 of the GST Act to apply for revocation of cancellation of registration from the date of passing of the order.
2. Accordingly, the GST Authorities/Concerned Officers may be directed to consider the application of revocation and allow the assessees to comply with the statutory requirements namely filing of returns, deposit of tax, interest, penalty and late fee within a further period of one month.
3. Authorities to take a pragmatic view and restore the R.Cs.
It is submitted that the Government will not be put to any pecuniary loss/revenue loss, rather the above suggestions and directions of this Hon’ble Court will be in the larger interest of trade, commerce and economic growth of the nation.”
4. Mr. Rudra Prasad Kar, learned Advocate, brought attention of this Court to the Judgment of Hon’ble Madras High Court rendered in the case of Tvl. Suguna Cutpiece Center Vrs. The Appellate Authority and Another, W.P.(C) No.25048 of 2021, etc. etc., vide Order dated 31.01.2022 reported at 2022 (61) GSTL 515 (Mad) to demonstrate that in the said Judgment a batch of matters qua certain taxpayers, having failed to furnish returns, registration certificates had been cancelled in the years 2018 and 2019 in terms of Section 29(2)(c), and their appeals have also been rejected by the Appellate Authority on the ground of limitation; nonetheless, the said Court protected them by issue of writ of mandamus with certain conditions. He also referred to decisions of other High Courts where similar views have been expressed and the statute under consideration being a Central statute, the views so expressed can be taken cognizance of for the purpose of extending akin privilege to the similarly circumstanced taxpayers of this State. In furtherance thereof, he urged that many taxpayers of this State being in unison to deposit tax, interest and penalty with late fee as is required under the CGST Act and rules framed thereunder, and non-grant of such opportunity cannot be said to enure to the larger interest of the State exchequer and disposing of writ petition with a direction to the Registering Authority to restore the registration by setting aside the Appellate Order would not only meet interest of justice, but also it would not cause prejudice to the Revenue. Therefore, he requested for extending one-time benefit.
5. Copy of suggestions with short note was served on Mr. Subash Chandra Mohanty, learned Standing Counsel for the opposite parties, who on instruction, submitted that in the event the petitioner deposits the required tax, interest, penalty and late fee, and furnishes all the returns, subject to verification by the authority concerned, the revocation of registration, upon duly constituted application under Section 30 of the CGST Act, could be considered by the Registering Authority.
6. The CGST Act, 2017 was promulgated and brought into force with effect from 01.07.2017, which is an Act to make provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government and the matters connected therewith or incidental thereto. Likewise, the Odisha Goods and Services Tax Act, 2017 (for brevity, “OGST Act”) was enacted to make provision for levy and collection of tax on intraState supply of goods or services or both by the State of Odisha and the matters connected therewith or incidental thereto. Thus, the resultant effect upon introduction of the CGST Act and the OGST Act is that certain other statutes including Odisha Value Added Tax Act, 2004 and the Odisha Entry Tax Act, 1999 which were imposing indirect taxes stood repealed and in their place indirect taxes are levied under the CGST Act and the OGST Act. The levy of tax on goods and services is being made by the Central Government under the provisions of the CGST Act, 2017 and concurrent power has been conferred on the State Government to levy goods and services tax under the provisions under the OGST Act. Relevant provisions involved for facilitating adjudication of the issue raised in the present case do require to be mentioned.
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