2020 (9) TMI 499 - HC - GST

Revocation of cancelled petitioner's registration - CGST Act - It is the contention of the petitioner that it has been regularly filing its monthly returns disclosing the trading transactions and also paying the GST tax liability within the due dates - HELD THAT - It is not in dispute that the show cause notices, the order of cancellation and the order rejecting the application for revocation of cancellation are passed by proper officer. The show cause notice dated 18.03.2020 and the order of cancellation of registration dated 06.06.2020 have already been challenged before this Court in W.P.No.8167/2020 and cannot be challenged in the present writ petition. Pursuant to the order passed in W.P.No.8167/2020, respondent no.4 has issued the notice dated 03.07.2020 to the petitioner. There is no jurisdictional error in the said notice. The petitioner has made his representation on 06.07.2020 and has been given a personal hearing by respondent no.4 and thereafter, he has passed the order dated 10.07.2020. Thus, the said order is a speaking order and it records the reasons for rejecting the application of the petitioner for revocation of cancellation of registration. The intimation to the petitioner dated 21.07.2020 is pursuant to the order dated 10.07.2020 and it has to be construed as an intimation of the decision taken on 10.07.2020 by respondent no.4, though the reason assigned in the said intimation and the manner in which the same is styled may be erroneous. Even otherwise, the order dated 10.07.2020 is a reasoned order and the same cannot be held as without jurisdiction and in violation of any principles of natural justice. If the petitioner is aggrieved by the said order, it ought to have filed an appeal under Section 107 of the CGST Act. The petitioner cannot challenge the same by way of a writ petition. The petitioner has filed the writ petition because it initially challenged certain provisions of the CGST Act and the CGST Rules which could not have been done by way of an appeal. However, for the reasons best known to the petitioner, it has given up the said prayer and has confined its arguments to erroneous exercise of jurisdiction by the respondents which this Court finds untenable for the aforementioned reasons. However, the Court is of the opinion that the petitioner cannot be bereft of its right of appeal as contemplated under the CGST Act. Petition dismissed.

Summary

Issues:
1. Challenge to the cancellation of registration under the Central Goods and Services Tax Act.
2. Allegation of violation of principles of natural justice and error in jurisdiction by the respondents.
3. Contention regarding the issuance of show cause notices and orders without adjudicating a prior show cause notice from the Commissioner of Central Tax.
4. Argument against the rejection of the application for revocation of cancellation.
5. Dispute over the maintainability of the writ petition after withdrawal of the challenge to the constitutional validity of the CGST Act provisions.

Issue 1: Challenge to the cancellation of registration under the Central Goods and Services Tax Act:
The petitioner, a private limited company engaged in trading, challenged the cancellation of its registration under the Central Goods and Services Tax Act. The petitioner contended that it regularly filed returns and paid tax liabilities on time. The cancellation was based on alleged violations, leading to a show cause notice and subsequent cancellation. The petitioner sought revocation, leading to a series of legal actions and orders.

Issue 2: Allegation of violation of principles of natural justice and error in jurisdiction:
The petitioner argued that the respondents' actions lacked natural justice principles and were in error regarding jurisdiction. The petitioner highlighted that the cancellation was based on alleged circular trading violations without addressing a prior show cause notice from the Commissioner of Central Tax. The rejection of the revocation application was deemed erroneous and against natural justice principles.

Issue 3: Contention regarding show cause notices and orders without adjudicating a prior notice:
The petitioner raised concerns about the issuance of show cause notices and orders without adjudicating a prior notice from the Commissioner of Central Tax regarding alleged violations. The petitioner argued that the cancellation should not proceed without addressing the pending adjudication.

Issue 4: Argument against rejection of revocation application:
The rejection of the application for revocation of cancellation was challenged by the petitioner. The petitioner contended that the rejection was erroneous, lacked natural justice principles, and was based on alleged violations without addressing current compliance.

Issue 5: Dispute over the maintainability of the writ petition:
There was a dispute over the maintainability of the writ petition after the petitioner withdrew the challenge to the constitutional validity of the CGST Act provisions. The respondents argued that the appeal mechanism under Section 107 of the CGST Act should be pursued instead of the writ petition.

The judgment dismissed the writ petition, stating that the petitioner could appeal under Section 107 of the Central Goods and Services Tax Act within thirty days. The court clarified that no opinion was expressed on the case's merits, leaving the decision to the appropriate authority upon appeal. The court noted the petitioner's initial challenge to CGST Act provisions, which was withdrawn, and emphasized the importance of utilizing the statutory appeal process for such disputes.