Petitioner | Natarajapathy Textiles |
Respondent | Commissioner of Commercial Taxes & Assistant Commissioner (ST) (Circle) |
Decision by | Madras High Court |
Date of order or Judgement | 22-March-2022 |
Citation no. | W.P.(MD).No.3181 of 2022 2022 (3) GSTPanacea 64 HC Madras |
Hon’ble Judge | Justice Saravanan |
Decision | In Favour of Assessee |
Revocation of Cancellation of Registration-Assessee directed to file returns for the period prior to the cancellation of registration together with tax defaulted along with interest and penalty.
Revocation of Cancellation of Registration-Facts of the Case
The respondent has cancelled the Goods and Services Tax (GST) Registration of the petitioner, as the petitioner had failed to file returns continuously for a period of six months.
The second respondent had issued a Show Cause Notice, dated 15.10.2019 to the petitioner to show cause as to why the Goods and Services Tax (GST) Registration of the petitioner should not be cancelled.
The petitioner had not replied to the said Show Cause Notice, which resulted in passing of the impugned order, cancelling the Goods and Services Tax Registration of the petitioner.
The petitioner filed an application for revocation of the cancellation of a registration which was rejected as time barred. The petitioner has approached this Court by way of this petition seeking for the above relief.
Argument Before Court
Revocation of Cancellation of Registration-Petitioner’s Contention
The petitioner submits that he was unable to give a reply to the said Show Cause Notice, due to the health issues.
It is further submitted that even though the petitioner has not replied to the said Show Cause Notice, the respondents ought to have given a justifiable reason for cancelling of the Goods and Services Tax of the Registration of the petitioner.
The petitioner further submits that even though the registration was cancelled by the second respondent, vide impugned order, the same was not within the knowledge of the petitioner due to the lock down imposed by the Government on account of the outbreak of covid-19 pandemic. Subsequently, the petitioner filed pending returns for the months up to October 2019.
Revocation of Cancellation of Registration-Respondent’s Argument
The respondents submits that the respondent has cancelled the GST registration by the impugned order, on the ground that the petitioner has not responded to the Show Cause Notice.
The respondents further submits that the Principal Secretary/Commissioner of Commercial Taxes vide the proceedings in P/35/2021-ADC (RC AND M)-CCT-CTD, dated 07.04.2021 in paragraph 6.5 has clarified as under:
“6.5. If any appeals have been filed against the Cancellation of Registration order by the Tax Payers, and if the said period falls beyond the period the prescribed period specified under Section 107, then the Deputy Commissioner, GST Appeals and Joint Commissioner, GST Appeals shall admit the application and passed order on merits if the prescribed period specified under Section 107 available with effect from 15.03.2021 after excluding the period from 15.03.2020 to 14.03.2021.“
The respondents further submits that the petitioner was given enough time to file an application against the impugned order but failed to exercise such action and therefore, no latitude should be given to the petitioner to restore the GST Registration under the provisions of the Goods and Services Tax Act.
Madras High Court Held
Revocation of Cancellation of Registration-The case of the petitioner is quite similar to the cases of the petitioners in W.P.Nos.25048, 25877, 12738 of 2021 and etc… Batch (Tvl. Suguna Cutpiece Center Vs Appellate Deputy Commissioner (ST) (GST) and others), dated 31.01.2022.
There are adequate safeguards under the GST enactments which can also be pressed against these petitioners even if their registration are revived so that, there is no abuse by these petitioners and there is enough deterrence against default in either paying tax or in complying with the procedures of filing returns.
Further, the Government requires tax to meet its expenditure. By not bringing these petitioners within the GST fold, unintended privilege may be conferred on these petitioners unfairly to not to pay GST should they end supplying goods and/or services without registration.
In the light of the above discussion, these Writ Petition are allowed subject to the following conditions:-
The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid.
The respondents shall take suitable steps by instructing GST Network, New Delhi to make suitable changes in the architecture of the GST Web portal to allow these petitioners to file their returns and to pay the tax/penalty/fine.
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