2024 (8) TMI 1318 - HC - GST

Cancellation of registration of the petitioner under the provisions of the WBGST/CGST Act, 2017 - non-filing returns for a continuous period of six months - HELD THAT - Although, an appeal was filed by the petitioner, such appeal was dismissed on the ground of limitation without there being any adjudication on merits - It may be noted that the petitioner is only a small businessman and claims that he had suffered reverses during the Pandemic. 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 - the petitioner through his Advocate has undertaken to comply with the provisions of the said Act and has agreed to make payment of tax, interest, fine and penalty as may be found due. The respondents are directed to activate the portal within one week from the date of communication of this order, so that the petitioner can file his returns, pays requisite amount of tax, interest, fine and penalty if not already paid - the order of cancellation dated 8th July, 2022 and the order dated 7th June, 2024 passed by the Appellate Authority also stands set aside. Petition disposed off.

Summary

Issues:
1. Cancellation of registration under WBGST/CGST Act, 2017.
2. Barred appeal due to limitation.
3. Prayers for restoration of registration.

Detailed Analysis:
The judgment by the High Court of Calcutta dealt with a writ petition challenging the cancellation of registration under the WBGST/CGST Act, 2017. The petitioner had failed to file returns for a continuous period of six months, leading to the cancellation of registration. Despite filing a belated appeal, it was rejected as barred by limitation. The petitioner, through their advocate, expressed genuine intentions to continue business activities and comply with the provisions of the Act, including making necessary payments. The government pleader argued that the cancellation was justified due to non-filing of returns and the appeal being time-barred. The court noted the petitioner's small business status and pandemic-related difficulties, emphasizing no tax evasion allegations. The court highlighted the counterproductive nature of license revocation on revenue recovery and directed a pragmatic approach, considering the petitioner's willingness to comply.

Furthermore, the court observed that the petitioner had undertaken to fulfill all obligations under the Act and proposed setting aside the cancellation order subject to conditions. These conditions included filing returns for the default period and paying the requisite tax, interest, fine, and penalty. Compliance within four weeks would result in restoration of registration; failure would lead to dismissal of the petition. The court also directed the respondents to activate the portal promptly for compliance facilitation. Consequently, the cancellation order and the appellate authority's decision were set aside, with no costs imposed on either party. Lastly, the judgment clarified that the writ petition was disposed of without admission of the respondents' allegations, and parties could obtain certified copies of the order upon fulfilling necessary formalities.