2023 (2) TMI 759 - HC - GST

Cancellation of registration of petitioner - appeal rejected on the ground of time limitation - petitioner failed to avail the opportunity of hearing - , the petitioner suffered medical emergency. - HELD THAT - The provisions of GST enactment cannot be interpreted so as to deny right to carry on Trade and Commerce to any citizen and subjects. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of shortcomings in the scheme of GST enactment. The right to carry on trade or profession cannot be curtailed contrary to the constitutional guarantee under Art. 19(1)(g) and Article 21 of the Constitution of India. If the person like petitioner is not allowed to revive the registration, the state would suffer loss of revenue and the ultimate goal under GST regime will stand defeated. The petitioner deserves a chance to come back into GST fold and carry on his business in legitimate manner. The petitioner, who is sufferer of unique circumstances resulting from pandemic and his health barriers, would be put to great hardship for want of GST registration. The petitioner who is small scale entrepreneur cannot carry on production activities in absence of GST registration. Resultantly, his right to livelihood would be affected. Since his statutory appeal suffered dismissal on technical ground, the situation cannot be allowed to continue. In the facts and circumstances of this case it would be appropriate to exercise our jurisdiction under Art. 226 of the Constitution of India. The order suspending the GST registration, the order dated 14-03-2022 cancelling GST registration of the petitioner passed by the State Tax Officer and the order dated 21-10-2022 passed by the Dy. Commissioner of Tax, Aurangabad are quashed and set aside - Petition allowed.

Summary

Issues involved:
Challenge to cancellation of GST registration, Appeal rejection on grounds of limitation, Invocation of Article 226 for protection of fundamental rights.

Challenge to cancellation of GST registration:
The petitioner, a fabrication business firm, sought relief under Article 226 to quash the cancellation of its GST registration due to failure to file returns amid financial difficulties and health issues. The State Tax Officer suspended the registration, issued a show cause notice, and eventually cancelled the registration. The petitioner's subsequent application for revocation was rejected, leading to an appeal that was dismissed on the basis of being time-barred under section 107 of the MGST Act, 2017.

Appeal rejection on grounds of limitation:
The Deputy Commissioner/State Tax (Appeal) rejected the petitioner's appeal challenging the cancellation of registration citing limitation issues under section 107 of the MGST Act, 2017. The appellate authority lacked the power to condone delays exceeding 30 days. The petitioner's livelihood and business operations were severely impacted by the cancellation, leading to a plea for judicial intervention under Article 226 to safeguard fundamental rights guaranteed under the Constitution.

Invocation of Article 226 for protection of fundamental rights:
The High Court acknowledged the petitioner's unique circumstances, including pandemic-related financial losses and health barriers, emphasizing the constitutional right to carry on trade and commerce. Reference was made to the Supreme Court's stance on the jurisdiction of constitutional courts under Article 226, highlighting the need to balance legislative intent with the enforcement of fundamental rights. The Court held that denying the petitioner the opportunity to revive registration would not only harm the individual but also impede revenue generation and the objectives of the GST regime. Consequently, the Court exercised its jurisdiction under Article 226, allowing the petitioner to continue business operations upon meeting specified conditions.

This detailed analysis of the judgment showcases the legal intricacies involved in the challenge to the cancellation of GST registration, the appeal rejection based on limitation grounds, and the invocation of Article 226 to protect fundamental rights in the context of trade and commerce.