Case Title | Kans Wedding Centre Vs The Commissioner Of Commercial |
Court | Kerala hight court |
Honorable Judges | Justice A.M.BADAR |
Citation | 2021 (02) GSTPanacea 158 HC Kerala WP(C).No.4227 OF 2021(C) |
Judgement Date | 18-February-2021 |
The learned counsel for the petitioner argues that his client was consistently paying taxes until the last year, when the Covid-19 pandemic caused his business to collapse. Despite this setback, the petitioner is currently prepared to submit all due returns and pay any outstanding taxes. The counsel contends that the respondent’s issuance of the notice at Ext.P3, which suspended the petitioner’s registration, was unjust and detrimental to his business operations. Consequently, the petitioner seeks the quashing and setting aside of the notice at Ext.P3.
On the other hand, the learned Government Pleader opposes the petition. He argues that the communication at Ext.P3 is merely a notice issued in GST Form No. GST REG-17/31, in accordance with Rule 22(1) of the GST Rules.
The learned counsel for the petitioner argues that his client had been consistently paying taxes until the previous year when the Covid-19 pandemic caused his business to collapse. Despite this setback, the petitioner remains willing to submit all required tax returns and pay any due taxes. The counsel contends that the respondent’s issuance of the notice at Ext.P3, which suspended the petitioner’s registration, was unjustified and detrimental to the petitioner’s business. Consequently, the petitioner seeks the quashing and setting aside of the notice at Ext.P3.
On the other hand, the learned Government Pleader opposes the petition, arguing that the notice at Ext.P3 is merely a procedural communication issued in GST Form No. GST REG-17/31 under Rule 22(1) of the GST Rules. The Government Pleader asserts that Section 29 of the GST Act 2017 grants the proper officer the authority to cancel a registration after issuing a necessary show-cause notice if returns have not been filed for six months. Therefore, the petitioner is obligated to respond to the show-cause notice for the cancellation of his registration. The Government Pleader further suggests that the petitioner has the option to request an earlier date for responding to the notice by approaching the proper officer.
The petitioner, represented by their learned counsel, argues that despite regularly paying taxes previously, the petitioner’s business suffered a collapse due to the COVID-19 pandemic. The petitioner expresses willingness to file all required returns and pay any due taxes. The counsel contends that the respondent’s issuance of notice (Ext.P3), which suspends the petitioner’s registration, is detrimental to the petitioner’s business and seeks to have this communication quashed.
The learned Government Pleader counters by stating that the notice in question (Ext.P3) is merely a procedural notice (GST Form No. GST REG-17/31) issued under Rule 22(1) of the GST Rules, pursuant to Section 29 of the GST Act 2017. This section authorizes the cancellation of registration after a show-cause notice if returns are not filed for six months. The Government Pleader insists that the petitioner must respond to this show-cause notice and may also request an earlier date for presenting their case to the proper officer if necessary.
Upon consideration, it was noted that the petitioner’s business was registered on 04/07/2020, with the registration certificate (Ext.P1) being issued subsequently. On 11/02/2021, a show-cause notice (Form GST REG-17/31) was issued to the petitioner, indicating a potential cancellation of registration due to non-filing of returns for six continuous months. The petitioner is required by this notice to provide an explanation to avoid cancellation.
In this case, the learned counsel for the petitioner argues that the petitioner has been regularly paying taxes but faced business collapse due to the COVID-19 pandemic. The petitioner is currently ready and willing to file all required returns and pay any due taxes. The counsel contends that the respondent should not have issued the notice (Ext.P3) suspending the petitioner’s registration as it adversely affects his business. Consequently, the petitioner seeks to quash and set aside the communication at Ext.P3.
The learned Government Pleader opposes the petition, arguing that the notice at Ext.P3 is simply a show-cause notice in GST Form No. GST REG-17/31 issued under Rule 22(1) of the GST Rules. According to the Government Pleader, Section 29 of the GST Act 2017 authorizes the proper officer to cancel a registration after issuing a necessary show-cause notice if returns have not been filed for six months. The Government Pleader insists that the petitioner must respond to this show-cause notice and may approach the proper officer to pre-pone the date for providing their response if needed.
Upon considering the submissions and reviewing the presented materials, the following facts were noted: The petitioner’s establishment was registered on 04/07/2020, and the registration certificate (Ext.P1) was issued accordingly. On 11/02/2021, a notice in Form GST REG-17/31 was issued to the petitioner, requesting a show-cause as to why the registration should not be canceled due to the non-filing of returns for a continuous period of six months. The petitioner is required by this show-cause notice to address the failure to file returns.
It is undisputed that the petitioner has not filed returns for the specified continuous period of six months. Section 29(2) of the GST Act, 2017, governs the cancellation of registration in such circumstances.
The learned counsel for the petitioner argues that the petitioner, who has been regularly paying taxes, faced a severe business downturn due to the Covid-19 pandemic. Despite this setback, the petitioner is ready and willing to file all pending returns and pay the due taxes. The counsel contends that the respondent’s issuance of a notice (Ext.P3) suspending the petitioner’s registration is unjust, as it adversely impacts the petitioner’s business. Therefore, the petitioner requests the quashing of the communication at Ext.P3.
In opposition, the learned Government Pleader argues that Ext.P3 is merely a notice issued in GST Form No. GST REG-17/31 under Rule 22(1) of the GST Rules, 2017. According to the Government Pleader, Section 29 of the GST Act, 2017 authorizes the proper officer to cancel registration after issuing a show-cause notice if returns are not filed for six consecutive months. The petitioner is expected to respond to this notice and can request an earlier date to present their case if needed.
The court reviewed the arguments and materials presented. The petitioner’s establishment was registered on 04/07/2020, receiving a registration certificate (Ext.P1). On 11/02/2021, a show-cause notice (Form GST REG-17/31) was issued, requiring the petitioner to explain why their registration should not be canceled due to non-filing of returns for six consecutive months.
It is undisputed that the petitioner failed to file returns for this period. According to Section 29(2) of the GST Act, 2017, if a registered person fails to file returns for six continuous months, the proper officer has the authority to cancel their registration after providing an opportunity for a hearing. Rule 22 of the GST Rules, 2017 outlines the procedure for cancellation, which includes issuing a show-cause notice. Furthermore, Section 29 allows for the suspension of registration during the cancellation process.
Considering these statutory provisions, the court finds no fault in the proper officer issuing the show-cause notice (Ext.P3), asking the petitioner to explain why their registration should not be canceled.
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