2024 (2) TMI 55 - HC - GST

Cancellation of the petitioner's GSTN Registration - impugned order has been passed without hearing the petitioner - violation of principles of natural justice - HELD THAT - The petitioner in this case is engaged in the business of executing contract works for Government and its agencies. Most of the small scale entrepreneurs like carpenters, electricians, fabricators etc. are almost uneducated and they are not accustomed with handling of e-mails and other advance technologies. Though they are providing e-mail IDs at the time of Registration, the applications are prepared by some agents by creating an e-mail IDs, however, on reality most of the Traders are not accustomed with handling of e-mails. They are also not aware about the consequences of not paying the Returns in Time. The department shall workout the possibilities of issuing these notices in the respective regional languages and also by SMS and registered post. So that, the uneducated traders can also respond to these notices to some extent, otherwise, these notices will be an empty formality and will not serve any purpose for which it has been issued. In similar circumstances, this Court, in TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. 2022 (2) TMI 933 - MADRAS HIGH COURT allowed the writ petitions by holding that no useful purpose would be served by keeping the petitioners out of the Goods and Service Tax regime. Petition allowed.

Summary

Issues Involved:
1. Cancellation of GSTN Registration.
2. Non-filing of returns due to accountant's ill-health.
3. Statutory limitation period for filing an appeal.
4. Right to livelihood and trade under the Constitution.

Summary:

1. Cancellation of GSTN Registration:
The petitioner's GSTN Registration No. 33ACAFS3704M2Z6 was canceled by the respondent on 03.02.2023 due to non-filing of returns. The petitioner, engaged in executing contract works for the Government, argued that the cancellation was done without a proper hearing.

2. Non-filing of Returns Due to Accountant's Ill-health:
The petitioner claimed that returns were regularly filed through an accountant who, due to ill-health, failed to file returns on time. This led to the cancellation of the GST registration, adversely affecting the petitioner's business and livelihood.

3. Statutory Limitation Period for Filing an Appeal:
The petitioner was unable to appeal the cancellation within the prescribed 90-day limitation period under Section 107(4) of the GST Act, as the GST portal did not accept the appeal post the limitation period. The respondent argued that sufficient opportunities were given to the petitioner to respond to the show cause notice issued on 25.01.2023.

4. Right to Livelihood and Trade under the Constitution:
The court referenced similar cases, such as the Bombay High Court and Uttarakhand High Court judgments, emphasizing that the GST provisions should not deny the right to trade and livelihood guaranteed under Articles 19(1)(g) and 21 of the Constitution. The court noted that stringent GST provisions should not deprive individuals of their livelihood, especially in unique circumstances like the pandemic and health issues.

Judgment:
The court allowed the writ petition, setting aside the impugned order dated 03.02.2023. The petitioner was directed to file returns within six weeks. The court highlighted that the objective of the government is to promote trade, not to curtail it, and emphasized the need for the department to consider issuing notices in regional languages and via SMS to ensure better compliance from uneducated traders. No costs were imposed.