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2021 (2) TMI 984 - HC - GSTValidity of SCN for cancellation of GST registration - Failure to file GST returns and pay taxes due ot covid-19 - Seeking to permit the petitioner to remit the arrears of tax within a time frame fixed by this Hon'ble Court - Rule 22 of the GST and ST Rules 2017 - HELD THAT - The petitioner's establishment came to be registered on 04/07/2020 and accordingly registration certificate, Ext.P1 came to be issued in its favour. On 11/02/2021, a notice in Form GST REG-17/31 came to be issued to the petitioner asking it to show-cause as to why its registration should not be canceled. The show-cause notice mention the reason for intended cancellation of registration as any tax payer other than composition tax payer has not filed returns for a continuous period of six months . The petitioner is directed by this show-cause notice to furnish the reply within 30 days and to appear before the proper officer on 26.03.2021. In the interregnum, registration of the petitioner is suspended by the proper officer. It is thus clear that, in the event the registered persons fail to file returns for a continuous period of six months, the proper officer can cancel the registration, but that has to be done by granting opportunity of hearing to the registered person. Rule 22 of the GST and ST Rules 2017 deals with procedure for cancellation of registration and as per requirement of this Rule, the registered person is required to be issued with a show-cause notice requiring him to show-cause as to why the registration shall not be canceled - In the wake of these statutory provisions, there are no fault on the part of the proper officer in issuing the show-cause notice at Ext.P3 asking the petitioner to show-cause as to why the registration of the establishment should not be canceled. The petitioner is permitted to approach the proper officer for preponement of date of hearing by submitting his reply to the show-cause notice - petition dismissed.
Issues:
1. Petitioner challenging the notice for suspension of registration due to failure to file returns. 2. Interpretation of Section 29 of the GST Act 2017 and Rule 22 of the GST and ST Rules 2017. 3. Proper officer's power to cancel registration for non-filing of returns for six months. 4. Validity of the show-cause notice issued under Rule 22(1) of the GST Rules. Analysis: The petitioner sought relief to set aside a notice, Ext.P3, suspending their registration due to non-filing of returns amidst the Covid-19 pandemic. The petitioner argued readiness to file returns and pay taxes, emphasizing the adverse impact of the suspension on their business. The respondent, represented by the Government Pleader, justified the notice under Section 29 of the GST Act 2017, empowering cancellation of registration for non-filing of returns for six months. The Government Pleader advised the petitioner to respond to the show-cause notice and approach the proper officer if needed. Upon reviewing the submissions and documents, the court noted the petitioner's non-filing of returns for six months, in line with Section 29(2) of the GST Act 2017. The court highlighted the statutory provisions empowering the proper officer to cancel registration after providing a hearing opportunity to the registered person. Rule 22 of the GST and ST Rules 2017 mandates a show-cause notice before registration cancellation proceedings. The court found no fault in the proper officer's issuance of the show-cause notice, Ext.P3, to the petitioner. Addressing the petitioner's concern regarding prolonged proceedings and business losses due to registration suspension, the court directed the petitioner to request preponement of the hearing date from the proper officer. The court dismissed the petition but allowed the petitioner to expedite the proceedings by cooperating with the proper officer. The court instructed the proper officer to decide on the show-cause notice of cancellation within three weeks from the petitioner's appearance, emphasizing cooperation between the parties for a swift resolution.
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