Khodal Brass Industry vs State of Gujarat

In a recent landmark case at the Gujarat High Court, M/S Khodal Brass Industry emerged victorious against the State of Gujarat, signaling a significant development for businesses grappling with registration cancellations. The petitioner had challenged the cancellation of their registration certificate and a show cause notice that had brought their operations to a halt.

The crux of the matter revolved around the provisions of the Gujarat Goods and Services Tax Act, 2017, with the petitioner’s registration being revoked due to the non-filing of returns, a situation that had severe repercussions for their business.

However, a pivotal twist unfolded as the Assistant Government Pleader pointed to a game-changing Notification issued on 31.03.2023. This new directive introduced a special procedure for the revocation of cancellations, offering a lifeline to struggling businesses.

Under the terms of the notification, businesses are now permitted to apply for the revocation of cancellation until 30th June 2023, provided they fulfill certain conditions, including the submission of pending returns, payment of dues, and adherence to specified criteria. This announcement marks a turning point for numerous businesses across the region.

Taking cognizance of this notification, the High Court opted to dispose of the case without delving into its merits. This decision effectively empowers the petitioner, M/S Khodal Brass Industry, and others facing similar challenges, to approach the competent authority for revocation under the newly introduced procedure. A resounding victory for businesses across India!

The case of M/S Khodal Brass Industry vs. State of Gujarat is set to become a precedent for businesses navigating registration challenges. It underscores the crucial importance of staying abreast of official notifications and seeking timely legal advice. In an ever-evolving legal landscape, this outcome emphasizes the potential for positive change and relief for businesses encountering unforeseen obstacles.

2. By way of this petition, the petitioner has sought reliefs for quashing and setting aside the order dated 31.3.2022 cancelling registration certificate of the petitioner passed by respondent No.3 and also for quashing and setting aside the order dated 27.10.2022 passed by respondent No.2. It is further prayed that the show cause notice dated 21.3.2022 be also quashed and set aside and the respondent be directed to forthwith restore the registration certificate of the petitioner with effect from 31.8.2021.

3. Learned advocate for the petitioner submitted that the petitioner was a regular tax payer and was also holding the registration certificate. A show cause notice for cancellation of registration dated 21.03.2022 came to be issued by the respondent under the provisions of Gujarat Goods and Services Tax Act, 2017 whereby the cause for the show cause for cancellation of registration was given as “any tax payer other than composition tax payer has not filed Returns for a continuous period of six months.” 

3.1. It is further submitted that vide order dated 21.3.2022 the respondent authority cancelled the registration by passing the order. The said order came to be challenged by the petitioner by filing an appeal under Section 107 of the Gujarat Goods and Services Tax Act, 2017. The said appeal came to be dismissed on 27.10.2022 by the Deputy State Tax Commissioner, Vivad-11, Rajkot on the ground of appeal being filed beyond the period of limitation. 

3.2. It is further submitted by the learned advocate for the petitioner that due to the cancellation of registration, the Returns could not be filed and it was further submitted that because of the cancellation of the registration, the business of the petitioner has become standstill. 

4. In response to the grievance of the petitioner regarding cancellation of the registration on the ground of non-filing of the Returns of Income, learned Assistant Government Pleader produced copy of the Notification dated 31.03.2023 issued under Section 148 of the Central Goods and Service Tax Act, 2017.

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KHODAL BRASS INDUSTRY

For Reference Visit:
Gujarat High Court

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GST Case Law