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2025 (2) TMI 349 - HC - GSTCancellation of GST registration of the petitioner - petitioner did not file its return in accordance with law for consecutive six months - HELD THAT - The issue has already received the attention of the Hon ble Division Bench in the matter of SUBHANKAR GOLDER VERSUS ASSISTANT COMMISSIONER OF STATE TAX SERAMPORE CHARGE ORS. 2024 (5) TMI 1262 - CALCUTTA HIGH COURT . The Hon ble Division Bench had observed that the appellant can be provided with one more opportunity to remedy the bridge as the appellant being an individual since a small retailer of imitation jewellery we deem it appropriate that the appellant should be permitted to remedy the bridge. The SCN to the writ petition the order of cancellation of GST registration and the order of the appellate authority to the writ petition stand set aside and quashed subject to petitioner files her GST returns for the entire period of default and pays requisite amount of tax interest fine and penalty and/or late fees within four weeks from date. Subject to fulfillment of the above conditions by the petitioner the GST registration of the petitioner shall be restored by the jurisdictional officer. Petition disposed off.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Justification for Cancellation of GST Registration Relevant legal framework and precedents: The cancellation of GST registration is governed by the Central Goods and Services Tax Act, 2017, and the West Bengal Goods and Services Tax Act, 2017. The relevant legal framework requires taxpayers to file returns periodically. Non-compliance can lead to cancellation of registration. Court's interpretation and reasoning: The Court considered previous judgments, including the decision in Subhankar Golder Vs. Assistant Commissioner of State Tax, where it was deemed appropriate to allow the appellant to remedy their default to avoid counterproductive outcomes that could hinder tax recovery. Key evidence and findings: The petitioner had not filed GST returns for six consecutive months, leading to the cancellation of their registration. However, there was no indication of tax evasion or fraudulent activities. Application of law to facts: The Court applied the principles established in prior cases, recognizing the need for a pragmatic approach that balances enforcement of compliance with the practicalities of tax recovery. Treatment of competing arguments: The State argued for the cancellation based on non-compliance, while the petitioner sought an opportunity to rectify the default. The Court favored the latter, emphasizing the importance of enabling business continuity and tax recovery. Conclusions: The Court concluded that the cancellation was not justified without providing the petitioner an opportunity to comply with the filing requirements and pay outstanding dues. 2. Opportunity to Remedy Default Relevant legal framework and precedents: The Court referenced the decision in Rana Chowdhury Vs. State of West Bengal, which allowed for the restoration of registration upon compliance with filing and payment obligations. Court's interpretation and reasoning: The Court reasoned that allowing the petitioner to file returns and pay dues would serve the interests of both the taxpayer and the revenue authorities, facilitating tax collection and business operations. Key evidence and findings: The petitioner's willingness to comply with the necessary conditions was a significant factor in the Court's decision. Application of law to facts: The Court applied the precedent set in previous cases to grant the petitioner a time-bound opportunity to fulfill their obligations. Treatment of competing arguments: The Court balanced the need for compliance with the practical implications of business disruption due to registration cancellation. Conclusions: The Court concluded that the petitioner should be allowed to remedy the default by filing returns and paying the requisite taxes, interest, fines, and penalties within a specified period. 3. Procedural Requirements for Restoration of GST Registration Relevant legal framework and precedents: The procedural requirements for restoring GST registration involve the reopening of the online portal to enable the petitioner to file returns and make payments. Court's interpretation and reasoning: The Court directed the respondents to facilitate compliance by reopening the portal, ensuring that the petitioner could meet the conditions for restoration. Key evidence and findings: The Court found that the procedural facilitation was necessary to allow the petitioner to comply with the conditions set by the Court. Application of law to facts: The Court applied the procedural requirements to ensure that the petitioner could effectively meet the conditions for restoring their registration. Treatment of competing arguments: The Court focused on ensuring procedural fairness and efficiency in enabling compliance. Conclusions: The Court concluded that the respondents must reopen the portal to allow the petitioner to file returns and make payments, thereby facilitating the restoration of GST registration. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: The Court reiterated the principle from Subhankar Golder that "the appellant should be permitted to remedy the bridge" and emphasized the pragmatic view that suspension or revocation of registration could be counterproductive. Core principles established: The judgment established that taxpayers should be given an opportunity to rectify non-compliance before facing severe consequences like registration cancellation. It also reinforced the procedural requirement for authorities to facilitate compliance by reopening necessary portals. Final determinations on each issue: The Court set aside the cancellation of GST registration, provided the petitioner complied with filing returns and paying dues within four weeks. The respondents were directed to reopen the portal to enable compliance, and failure to meet these conditions would result in the automatic dismissal of the writ petition and restoration of the cancellation.
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