2022 (11) TMI 677 - HC - GST

Cancellation of GST registration of petitioner - appeal was dismissed on the ground that it was time-barred - HELD THAT - The petitioner, concededly, did not file a reply to the show-cause notice. There is, however, a reference to a reply dated 01.11.2021 in the first line of the order dated 28.12.2021. This observation is followed by another observation which indicates that no reply to the show-cause notice was submitted by the petitioner - the order cancelling the registration i.e., the order dated 28.12.2021 is a cut and paste job. There has been no application of mind either while framing the show-cause notice or while passing the order of cancellation of registration. The petitioner neither filed a reply to the show-cause notice nor did it s authorized representative appear before the concerned officer. This litigation could have been avoided if the petitioner had taken the necessary steps to protect its interests - the procrastination on the part of the petitioner got compounded in the appeal being filed well beyond the time prescribed under the Act. The respondents/revenue are requested to return with instructions as to whether, having regard to the fact that the petitioner is a professional chartered accountancy concern, the order cancelling the registration could be recalled on terms and conditions deemed fit by the respondents/revenue. Issue notice to the respondents - List the matter on 05.12.2022.

Summary

Issues:
1. Appeal against GST Registration cancellation dismissed as time-barred.

Analysis:
The writ petition challenged the dismissal of the appeal against the cancellation of GST Registration, citing it as time-barred. The petitioner argued that the show cause notice and the order lacked jurisdictional facts. The cancellation was based on non-filing of returns as required under Section 39 of the CGST Act, and missing returns for specific months. The petitioner contended that the cancellation was premature as it did not meet the six-month continuous default requirement under Section 29(2)(c) of the Act.

The show-cause notice and the cancellation order were found to be deficient. The notice lacked clarity and failed to provide a proper reason for cancellation. The cancellation order was deemed to be a cut-and-paste job without due application of mind. It was noted that the cancellation was made effective retrospectively, beyond the proposal in the show-cause notice. The petitioner's failure to respond or appear aggravated the situation, leading to the appeal being filed late.

The Court emphasized the importance of keeping taxpayers within the GST regime for revenue purposes. Considering the petitioner's professional nature as a chartered accountancy concern, the Court suggested recalling the cancellation order on suitable terms. The respondents were requested to return with instructions on the possibility of recalling the order. Formal notice was issued to the respondents, and if they decide to contest the petition, a counter-affidavit will be filed before the next hearing date scheduled for December 5, 2022.