Case Title | Asean Aromatics Private Limited Vs Assistant Commissioner (Circle) Gst |
Court | Madras High court |
Honorable Judges | Justice Anita Sumanth |
Citation | 2019 (02) GSTPanacea 67 HC Madras W.P.No. 807 of 2019 and WMP.Nos.888 & 890 of 2019 |
Judgement Date | 22- February -2019 |
The October 4, 2018, the petitioner received a show cause notice concerning the potential cancellation of their registration. In response, the petitioner submitted a reply on October 10, 2018, explaining that the delay in compliance was due to a severe shortage of working capital. The petitioner also indicated that they were awaiting an enhancement of their working capital and assured that the dues would be settled as soon as possible. Despite these explanations, an order was issued without considering the objections raised by the petitioner.
Furthermore, the Learned Standing Counsel highlighted Section 30 of the Goods and Service Tax Act, 2017. This section stipulates that to revoke the cancellation of registration, the petitioner must file returns for the entire period of non-compliance and pay the associated tax dues.
The petitioner received a show cause notice on October 4, 2018, for the cancellation of their registration. In response, the petitioner submitted a reply on October 10, 2018, citing a severe working capital shortage as the cause for the delay and stating that they were awaiting an enhancement of working capital to settle the dues promptly. Despite this explanation, the impugned order was issued without addressing the petitioner’s objections.
The Learned Standing Counsel highlighted Section 30 of the Goods and Services Tax (GST) Act, 2017, which mandates that all returns for the non-compliance period must be filed with the tax dues to revoke the registration cancellation.
Both counsels referenced various circulars issued by the Central Board of Indirect Taxes and Customs and the State’s Principal Secretary/Commissioner of Commercial Taxes, which relaxed the deadlines for submitting returns. However, neither counsel could clearly explain the current applicable time limits. The court noted that the GST regime is still evolving and that the authorities have considered the interests of small traders by granting these time limit relaxations.
Given these circumstances, the court directed the Principal Secretary/Commissioner of Commercial Taxes in Chennai to review and decide on the petitioner’s application dated December 18, 2018. This application requested permission to pay pending GST dues in six monthly installments, starting with a payment of Rs.10,00,000 on December 14, 2018. The court instructed the Principal Secretary/Commissioner to consider the technical difficulties faced by the petitioner, the cessation of business activities due to the registration cancellation over the past four months, and the relevant circulars in making their decision.
The petitioner was ordered to appear before the Principal Secretary/Commissioner on March 4, 2019, at 10:30 am, or on a proximate date as communicated, with the decision on the application to be issued within two weeks thereafter.
The petitioner received a show cause notice on 04.10.2018 for the cancellation of registration due to non-compliance. In response, they cited severe working capital shortage and assured that dues would be settled soon. However, the impugned order was passed without addressing these objections.
The learned Standing Counsel highlighted Section 30 of the Goods and Service Tax Act, 2017, which mandates filing returns for the entire non-compliant period along with tax dues to revoke registration cancellation.
Both counsels referenced circulars from the Center and State relaxing time limits for return submission, indicating an understanding of the challenges in GST compliance.
The court, unable to determine the prevailing time limits from the circulars, inferred that authorities considered the GST regime’s infancy and granted relaxations, especially benefiting small traders.
Consequently, the court directed the Principal Secretary/Commissioner of Commercial Taxes to review the petitioner’s application, allowing payment of pending GST dues in six monthly installments. The petitioner, who had already paid the first installment, was asked to appear before the Principal Secretary/Commissioner on a specified date for further proceedings. Orders were to be passed within two weeks.
The writ petition was disposed of accordingly, with no costs incurred. Connected miscellaneous petitions were closed.
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