2024 (10) TMI 942 - HC - GST

Cancellation of registration of the petitioner under the provision of the WB GST/CGST, 2017 - rejection of appeal on the ground that the same was time barred in terms of provision contained in Section 107 (4) of the said Act - HELD 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 evaded tax or had been engaging in dubious process to evade tax. Taking note of the fact that suspension/revocation of licence would be counter productive and work against the interest of the revenue since the petitioner in such case would not be able to carry on his business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of revenue, the respondents should take a pragmatic view in the matter and permit the petitioner to carry on his business. The order dated 15th January, 2020 cancelling the registration of the petitioner is set aside subject to the condition that the petitioner files his returns for the entire period of default and pay requisite amount of tax, interest, fine and penalty. Petition disposed off.

Summary

Issues:
Challenge to cancellation of registration under WB GST/CGST Act
Appeal rejection under Section 107 of the Act

Detailed Analysis:
The petitioner filed a writ petition challenging the cancellation of registration under the WB GST/CGST Act and the rejection of the appeal under Section 107 of the Act. The petitioner was served with a show cause notice for cancellation of registration due to non-filing of returns for a continuous period of six months. The petitioner stated that due to the pre-covid period, they could not appropriately respond, leading to the cancellation of registration. Although the petitioner did not apply for revocation, an appeal was made under Section 107 of the Act, which was rejected as time-barred by the Appellate Authority.

The petitioner expressed readiness to comply with the provisions of the Act to continue their business. The respondent argued that the petitioner failed to comply with the Act, leading to the cancellation of registration. The Court noted that the cancellation was based on non-filing of returns and not on tax evasion or dubious practices. Recognizing that suspension/revocation would be counterproductive to revenue interests, the Court decided to permit the petitioner to carry on their business by setting aside the registration cancellation order.

Referring to a previous case, the Court directed the petitioner to file returns for the entire default period and pay the necessary tax, interest, fine, and penalty. Compliance within four weeks would result in the restoration of the petitioner's registration. Failure to comply would lead to the dismissal of the petition. The respondents were instructed to activate the portal promptly for compliance. Consequently, the order rejecting the appeal was also set aside, and the writ petition was disposed of without costs. All parties were directed to act based on the server copy of the order downloaded from the Court's official website.