2020 (2) TMI 342 - HC - GST

GST registration of the petitioners blocked - failure to pay GST for long period - permission to purchase goods and other articles with their GST registration - HELD THAT - It is the admitted case of the petitioners that they have not paid the tax dues pursuant to the assessment orders rendered in this case for the respective assessment years and that petitioners would contend that petitioners will be prosecuting statutory appeals to impugn the legality and correctness of the said assessment orders and that in the meanwhile, due to default in such payments, respondents have blocked the GST registration itself. It is for the petitioners to take necessary steps to ensure that due tax amounts are paid, so that, the default in that regard is not for more than a period of two months as envisaged in clause (b) of Rule 138E(1) of the Rules. In case the petitioners wish to prosecute statutory appeals to impugn the assessment orders for the years concerned, it is for the petitioners to avail such remedies, in accordance with law. Petition disposed off.

Summary

Issues:
1. Blocking of GST registration due to non-payment of tax.
2. Interpretation of Rule 138E of the Central Goods and Services Rules, 2017.

Analysis:
1. The petitioners, contractors with Class-'C' registration, completed government works without GST deduction from bill amounts. Subsequently, assessment orders were issued for tax payment for the years 2017-18, 2018-19, and 2019-20. Due to non-payment, their GST registration was blocked, hindering their ability to purchase goods and execute projects. The writ petition sought relief against this action.

2. The court noted the petitioners' admission of non-payment of tax dues pending appeals against assessment orders. The Government Pleader referred to Rule 138E, which restricts E-way bill information for non-compliant taxpayers. The rule mandates payment of due amounts and filing of returns to unblock E-way bills. The petitioners were advised to settle tax liabilities promptly to avoid prolonged defaults under the rule. The court emphasized the need for compliance with tax obligations and legal remedies for challenging assessment orders.

In conclusion, the court disposed of the writ petition with directions for the petitioners to address their tax liabilities promptly to prevent prolonged blocking of GST registration and E-way bill services. Compliance with tax laws and pursuit of statutory appeals were underscored as essential for resolving the issues raised in the case.