2020 (4) TMI 174 - HC - GST

Maintainability of petition - availability of alternative remedy of appeal - cancellation of registration - closure of business - HELD THAT - The petitioner has a remedy of appeal under Section 107 of the Act. On a plain and simple language of section 29 of the Act, even if the person stops the business resulting in cancellation of the registration, the liability accrued till such time cannot be waived or diminished. Petition dismissed.

Summary

Issues: Challenge to assessment order under State Goods and Service Tax Act 2017 based on business closure notification and filing of monthly returns.

The judgment by the High Court of Kerala pertains to a petitioner challenging assessment orders under the State Goods and Service Tax Act 2017. The petitioner, a business entity, had informed about the closure of the business and had filed all monthly returns during the business operation. The petitioner argued that as no assessment orders were issued or information sought under Section 46 of the Act, challenging the assessment was unnecessary. However, the State Counsel contended that assessment orders were passed for the periods from April 2018 to June 2019 due to the failure to file returns. The court noted that even if a business is closed leading to registration cancellation, the liability for taxes accrued till that point cannot be waived. The court highlighted the availability of an appeal remedy under Section 107 of the Act for the petitioner. Ultimately, the court found no grounds for interference and dismissed the writ petition.

In this case, the primary issue was the challenge to assessment orders under the State Goods and Service Tax Act 2017 by a business entity based on the closure notification and filing of monthly returns. The petitioner argued that since they had informed about the business closure and filed all monthly returns during the operation, challenging the assessment was unwarranted. On the other hand, the State Counsel contended that assessment orders were issued for the relevant periods due to the failure to file returns, specifically for the periods from April 2018 to June 2019. The court emphasized that even if a business is closed, leading to registration cancellation, the liability for taxes accrued until that point cannot be waived or reduced.

Furthermore, the court highlighted the provision of an appeal remedy under Section 107 of the Act for the petitioner to address any grievances regarding the assessment orders. The court interpreted Section 29 of the Act, stating that even if a business ceases operations resulting in registration cancellation, the liability for taxes accumulated until that point remains intact. The judgment underscored the legal principle that the closure of a business does not absolve the entity from its tax obligations up to the point of closure. Ultimately, after considering the arguments presented, the court found no valid reasons to interfere and subsequently dismissed the writ petition, thereby upholding the assessment orders issued under the State Goods and Service Tax Act 2017.