2024 (5) TMI 820 - HC - GST

Cancellation of registration of the petitioner under the WBGST Act, 2017 - failure on the part of the petitioner to file its returns for six months - HELD THAT - From the proceedings initiated by the respondents it would transpire that the show cause notice was issued on the petitioner for cancellation of the petitioner s registration on account of failure on the part of the petitioner to file its returns. Incidentally, the said show cause notice was issued at a point of time when the country was under lock down. Although, the cancellation order of the petitioner s registration dated 17th March 2021 records that the petitioner had submitted a response on 15th May 2020, it is found from the pleadings filed by the petitioner that the petitioner was denied such opportunity to file its response. Be that as it may, taking into consideration the fact that suspension/revocation of license would be counter productive and works against the interest of the revenue since, the petitioner in such a case would not able to carry on its business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax, the respondents should take a pragmatic view in the matter and permit the petitioner to carry on its business. Application disposed off.

Summary

Issues involved: Challenge to cancellation of registration under the WBGST Act, 2017 without opportunity of hearing.

Comprehensive Details:

Issue 1: Cancellation of Registration without Opportunity of Hearing
The petitioner challenged the cancellation of registration under the WBGST Act, 2017, due to failure to file returns for six months. The petitioner contended that the cancellation order was issued without providing an opportunity of hearing, despite the pandemic hindering their response submission. The petitioner argued that the cancellation would hinder their business operations and revenue interests. The respondents did not accuse the petitioner of tax evasion but emphasized the need for filed returns to determine tax liability.

The Court observed that the show cause notice for cancellation was issued during a lockdown period, raising doubts about the petitioner's ability to respond. Despite the cancellation order mentioning a response from the petitioner, the Court found no evidence of the petitioner being given a chance to submit a response. Considering the adverse impact on revenue and business operations, the Court directed the revocation of the cancellation, with a requirement for the petitioner to promptly file returns for the determination of tax liability. The Court highlighted the necessity for filed returns to ascertain the final tax liability.

In conclusion, the writ application challenging the cancellation of registration was disposed of without costs, with instructions for all parties to adhere to the order downloaded from the Court's official website.