2023 (4) TMI 542 - HC - GST

Cancellation of GST registration of petitioner - lack of application of mind - petitioner's appeal rejected on the ground that it is filed beyond four months that is permissible under the provisions of Sections 107(1) and 107(4) of the Central Goods and Services Tax Act, 2017 - HELD THAT - What remains salient is the fact that the third respondent has proceeded to cancel the registration on the ground that he has perused the reasons offered in response to the Show Cause Notice and the submissions during the personal hearing notwithstanding the fact that the petitioner, who contends that it was not served with the notice dated 07.09.2021, admittedly has not filed any response or participated in any hearing. As rightly pointed out by Sri. Skanda Kumar, the learned counsel for the petitioner, non-application of mind stands out and therefore, this Court must interfere. The order dated 27.09.2021 Annexure-A is quashed subject to the condition that the petitioner files returns within a period of four 4 weeks from the date of receipt of a certified copy of this order. Failing which, the cancellation order shall stand revived - Petition allowed.

Summary

Issues involved:
The cancellation of GST registration due to lack of response to show cause notice and submissions made during personal hearing, the petitioner's appeal rejection based on delay beyond permissible period, and the contention of lack of application of mind leading to arbitrariness in the cancellation.

Cancellation of GST registration:
The petitioner's GST registration was cancelled by the third respondent despite the petitioner claiming it did not receive the show cause notice dated 07.09.2021 and therefore did not file any response or participate in any hearing. The petitioner argued lack of application of mind and arbitrariness in the cancellation. The learned counsel for the petitioner highlighted that the cancellation was based on reasons offered in response to the show cause notice and submissions during the personal hearing, even though the petitioner did not participate. The Court agreed with the petitioner, noting non-application of mind by the third respondent, and quashed the cancellation order subject to the condition that the petitioner files returns within four weeks.

Appeal rejection based on delay:
The petitioner's appeal against the order dated 27.09.2021 was rejected on the grounds of being filed beyond the permissible period under Sections 107(1) and 107(4) of the Central Goods and Services Tax Act, 2017. The petitioner pleaded bona fides due to health reasons affecting the proprietor and family members between 01.03.2021 and 12.10.2021, but failed to provide documents to support this claim. The appellate authority refused to condone the delay, citing statutory limitations, and emphasized that the petitioner did not present any circumstances to justify the delay beyond four months.

Conclusion:
The Court allowed the petitioner's plea, quashing the order of GST registration cancellation. However, the petitioner was directed to file returns within four weeks from receiving a certified copy of the order; failure to do so would result in the revival of the cancellation order. The Court disposed of the petitioner's grievance against the order dated 12.10.2022 in appeal, as it was no longer relevant following the decision on the cancellation order dated 27.09.2021.