2024 (8) TMI 460 - HC - GST

Cancellation of registration of the petitioner under the Central/West Bengal Goods and Services Tax Act, 2017 - non-filing of returns - no reply to the show cause was given by the petitioner - HELD THAT - Admittedly, it is found that the registration of the petitioner had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had been adopting 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 be 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. Having regard to the aforesaid and taking note of the direction issued by the Hon ble Division Bench of this Court in the case of SUBHANKAR GOLDER VERSUS ASSISTANT COMMISSIONER OF STATE TAX, SERAMPORE CHARGE ORS. 2024 (5) TMI 1262 - CALCUTTA HIGH COURT , It is proposed to set aside the order dated 15th December, 2022 cancelling the registration of the petitioner subject to the condition that the petitioner files his returns for the entire period of default and pays requisite amount of tax and interest and fine and penalty. The respondents are directed to activate the portal within one week from date, so that the petitioner can file its returns, pays requisite amount of tax, interest, fine and penalty - Petition disposed off.

Summary

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

Analysis:
The petitioner filed a writ application challenging the cancellation of their registration under the Central/West Bengal Goods and Services Tax Act, 2017. The petitioner was served a notice for failing to file returns for six months, leading to the cancellation of registration. The petitioner's advocate argued that the petitioner intended to comply with the Act but failed to respond to the notice. Referring to a previous judgment, the advocate requested the cancellation order to be set aside upon fulfilling certain conditions. On the other hand, the State's advocate contended that the cancellation was justified as the petitioner did not comply with statutory provisions and failed to respond to the show cause notice.

The court noted that the cancellation was due to non-filing of returns, not tax evasion. Recognizing that suspending the registration would hinder business operations and tax recovery, the court urged a pragmatic approach. It was observed that without filed returns, the final tax liability couldn't be determined. Citing a previous judgment, the court decided to set aside the cancellation order subject to the condition that the petitioner files returns for the default period and pays the necessary tax, interest, fine, and penalty within four weeks. Failure to comply would result in the dismissal of the writ petition.

The court directed the respondents to activate the portal promptly for the petitioner to fulfill the conditions. The judgment concluded by disposing of the writ petition without any costs, instructing all parties to act based on the official copy of the order downloaded from the court's website. Additionally, it allowed the parties to obtain a certified copy of the order upon completing the necessary formalities.