2024 (6) TMI 895 - HC - GST

Cancellation of registration of the petitioner - failure on the part of the petitioner to furnish returns under Section 39 of the CGST Act, for a continuous period of six months - Appeal dismissed on the ground that the same was barred by limitation as the same was filed beyond the time prescribed as provided for in Section 107 of the said Act - HELD THAT - Admittedly, the petitioner s registration under the said Act had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had been adapting dubious process to evade tax. Taking note of the fact that the suspension/revocation of license would be counterproductive and works against the interest of the revenue since, the petitioner in such a case would not able to carry on his 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 his business. It is the contention of the respondents that the petitioner is not interested to comply with the provisions of the said Act, it is, however, noticed that immediately upon issuance of the show cause the petitioner had filed its returns. Such fact would corroborate from the print out taken from the portal of the respondents. The order dated 11th May, 2023, rejecting the application for revocation of the order of cancellation and the order dated 26th February, 2024 passed by the appellate authority also stand set aside - Petition disposed off.

Summary

Issues involved: Challenge to the cancellation of registration under the Central/West Bengal Goods and Services Tax Act, 2017.

Summary:
The petitioner, a small businessman and works contractor, challenged the cancellation of registration due to defaults in filing returns during the Covid period. The petitioner filed returns after receiving a show cause notice, but the registration was still cancelled. An application for revocation was rejected for not responding to a further show cause. The appeal was dismissed as barred by limitation, but the appellate authority upheld the cancellation. The petitioner sought further opportunity to comply with the Act. The respondents argued lack of compliance and bona fide conduct by the petitioner.

The Court noted the cancellation was due to non-filing of returns, not tax evasion. Considering the impact on business and tax recovery, the Court directed pragmatic view and restoration of registration upon compliance with conditions. The petitioner must file returns for the default period and pay taxes, interest, fine, and penalty. Failure to comply within 4 weeks will result in dismissal of the petition. The respondents were directed to activate the portal for compliance. The orders rejecting revocation and appellate authority's decision were set aside. No affidavit-in-opposition was called for, and the petition was disposed of without costs.

The judgment emphasized the importance of compliance with tax laws while balancing the interests of the taxpayer to carry on business. The Court's decision aimed to provide a chance for the petitioner to rectify the defaults and continue business operations within the legal framework.