2022 (12) TMI 261 - HC - GST

Cancellation of registration of the petitioner - petitioner has not commenced his business within six months and he has taken voluntary registration - HELD THAT - This Court after hearing the respective counsel finds that the petitioner has not preferred any reply before respondent no. 3 to the show-cause notice, as such, the order dated 19.09.2019 passed by the authority cancelling the registration as well as the appellate order dated 25.08.2021 passed by the appellate authority are hereby quashed and the matter is remitted back to respondent no. 3 to decide the matter giving an opportunity to petitioner to move his reply within 15 days from today. Petition allowed in part.

Summary

Issues:
1. Cancellation of GST registration by the Assistant Commissioner.
2. Upholding of cancellation order by the Appellate Authority.
3. Interpretation of Section 29(2)(d) of the Goods and Service Tax Act.
4. Failure to file a reply to show-cause notice.
5. Justification for delayed commencement of business in the construction sector.
6. Quashing of cancellation order and remittance of the matter back to the Assistant Commissioner.

Analysis:
1. The High Court addressed the issue of the cancellation of GST registration by the Assistant Commissioner and the subsequent upholding of the cancellation order by the Appellate Authority. The petitioner, engaged in construction business, had his registration cancelled due to non-filing of returns for two years after initially declaring zero sales. The Court noted that the petitioner failed to respond to the show-cause notice, leading to the cancellation of registration. The delayed appeal was rejected as time-barred.

2. The State invoked Section 29(2)(d) of the GST Act, arguing that the petitioner had not commenced business within six months and had voluntarily registered. The petitioner contended that due to the nature of the construction business, commencement was delayed, justifying the non-filing of returns within the specified period. The Court considered these arguments and found in favor of the petitioner.

3. In its decision, the Court quashed the cancellation order and the appellate order, remitting the matter back to the Assistant Commissioner. The petitioner was granted an opportunity to submit a reply within 15 days, and the Assistant Commissioner was directed to consider the reply on its merits within the following month and pass necessary orders in accordance with the law. The writ petition was partly allowed, providing relief to the petitioner in the matter of GST registration cancellation.