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Case Title |
Devi Products Vs State Of Gujarat |
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Court |
Ahmedabad High court |
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Honorable judges |
Justice Sandeep N. Bhatt Justice Sonia Gokani |
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Citation |
2023 (02) GSTPanacea 276 HC Ahmedabad R/SPECIAL CIVIL APPLICATION NO. 2288 of 2023 |
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Judgement Date |
15- February-2023 |
The petitioner in this case has filed a petition under Article 226 of the Constitution, seeking to challenge the legality and validity of an order dated 24.03.2021 passed by the respondent No.2. This order pertains to the cancellation of the registration certificate granted to the petitioner under the Central Goods and Service Tax Act, 2017 and Gujarat Goods and Services Tax, 2017 (referred to as GST Acts). The cancellation was made effective from 01.07.2017. The petitioner contends that this cancellation was carried out in violation of principles of natural justice.
In essence, the petitioner is disputing the legality of the cancellation of their registration certificate under the GST Acts. They argue that the cancellation was unjust as it did not adhere to the principles of natural justice, which typically entail providing a fair hearing and an opportunity to present one’s case before any adverse action is taken.
The crux of the matter lies in whether the cancellation was carried out in accordance with the provisions of the GST Acts and whether due process was followed. The petitioner is asserting that it was not, hence their petition to challenge the order. This case underscores the importance of procedural fairness and adherence to legal norms in administrative actions, particularly in matters concerning taxation and regulatory compliance.
The petitioner in this case is challenging the legality and validity of an order issued by respondent No.2 on 24.03.2021, which cancelled the petitioner’s registration certificate under the Central Goods and Service Tax Act, 2017 and Gujarat Goods and Services Tax, 2017 (“GST Acts”), effective from 01.07.2017. The petitioner alleges that this cancellation was done in violation of principles of natural justice.
The petitioner also contests a show cause notice dated 15.03.2021, issued under Rule 21 of the CGST Rules and GST Rules, whereby respondent No.2 suspended the registration certificate with immediate effect from 15.03.2021 itself.
The petitioner, who is a sole proprietor engaged in trading brass articles, was previously registered with the Gujarat Value Added Tax under the Gujarat Value Added Tax, 2003 and Central Sales Tax Act, 1956. They obtained registration under the GST Act from 01.07.2017 as per Section 139 of the GST Act and were granted a final certificate of registration under this provision.
The petitioner claims that up until June 2020, they had been filing their income returns under the GST Act. However, due to prevailing circumstances, they ceased business activities after June 2020. Consequently, they held a bona fide belief that there was no requirement to file returns under the GST Act thereafter.
that there was no requirement to file returns under the GST Act, as he had no business activities. However, despite this belief, the petitioner’s registration under the Central Goods and Service Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (GST Acts) was cancelled by an order dated 24.03.2021, effective from 01.07.2017. This cancellation was preceded by a show cause notice dated 15.03.2021, where it was stated that the petitioner’s registration was liable to be cancelled due to non-filing of returns for a continuous period of six months.
The petitioner, a sole proprietor engaged in the trading of brass articles, had previously been registered under the Gujarat Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956. Upon the implementation of the GST Act, the petitioner obtained registration with effect from 01.07.2017, as mandated by Section 139 of the GST Act.
The petitioner contends that until June 2020, he had regularly filed his returns under the GST Act. However, due to the adverse effects of the Covid-19 pandemic, his business suffered greatly, and he ceased operations after June 2020. Consequently, he believed there was no requirement to file returns under the GST Act.
In response to the show cause notice issued on 15.03.2021, the petitioner claims that his registration was suspended with immediate effect on the same day without any reasons being provided. Subsequently, his registration was cancelled by the respondent without specifying the grounds or reasons for cancellation, and no tax demand was determined. Dissatisfied with this decision, the petitioner has approached the court under Article 226 of the Constitution, alleging a violation of principles of natural justice.
The petitioner argues that the cancellation of his registration was unjustified, given the extenuating circumstances of the Covid-19 pandemic, which severely impacted his business operations. He asserts that he acted in good faith based on his understanding that no business activity warranted the filing of returns under the GST Act.
In light of these circumstances, the petitioner seeks the court’s intervention to challenge the legality and validity of the order cancelling his registration under the GST Acts. He contends that the cancellation was arbitrary and in violation of principles of natural justice, and he requests relief from the court.
The petitioner has filed a petition under Article 226 of the Constitution, challenging the legality and validity of an order passed by respondent No.2 on 24.03.2021, which cancelled the petitioner’s registration certificate under the Central Goods and Service Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (“GST Acts”), effective from 01.07.2017. The petitioner alleges that this cancellation was done without following principles of natural justice.
The petitioner, a sole proprietor engaged in trading brass, had been registered under the Gujarat Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956. With the implementation of the GST Act, the petitioner obtained registration from 01.07.2017. The petitioner claims that until June 2020, they had regularly filed returns under the GST Act. However, due to circumstances such as the COVID-19 pandemic, their business ceased post-June 2020, leading them to believe they were not required to file GST returns.
The respondent issued a show cause notice on 15.03.2021, citing the petitioner’s failure to file returns for six consecutive months as grounds for potential cancellation of registration. The petitioner argues that their registration was suspended immediately upon issuance of the notice without providing reasons, and later cancelled effective from 01.07.2017, again without specifying reasons.
The petitioner contends that the cancellation was unjustified, especially considering the financial hardship caused by the pandemic, which led to the cessation of their business operations. They seek several reliefs from the court, including quashing the impugned order of cancellation, restoring their registration with effect from 01.07.2017, interim relief to restore registration pending the petition’s disposal, ex-parte ad-interim relief, costs, and any other relief deemed just and proper by the court.
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