2023 (7) TMI 1054 - HC - GST

Violation of principles of natural justice - inability to avail the opportunity of hearing extended for bonafide reasons - Cancellation of registration of petitioner - failure to file returns - HELD THAT - The petitioner has preferred first appeal contending that the petitioner has filed response but could not appear for personal hearing because he was suffering from lungs disease and was advised bed rest which had a cascading effect on his business including the failure to file monthly returns. The petitioner's appeal is rejected on the ground of limitation. If the petitioner can demonstrate bonafides, there would be no need to take a pedantic approach. The reasons assigned by the petitioner could be bonafide and the petitioner must have another opportunity of hearing to establish the same. The third respondent will therefore have to necessarily extend an opportunity and consider the circumstances that are relied upon by the petitioner. The petition is allowed in part, setting aside the cancellation order dated 19.04.2022 Annexure-B restoring the proceedings to the third respondent for reconsideration.

Summary

Issues involved:
The cancellation of registration under Section 29[3] of the Central Goods and Services Tax Act, 2017 due to failure to file returns, violation of principles of natural justice, inability to avail the opportunity of hearing for bonafide reasons, rejection of appeal on the ground of limitation.

Cancellation of Registration:
The petitioner's registration was cancelled by the impugned order dated 19.04.2022 under Section 29[3] of the CGST Act due to the failure to file returns. The petitioner contended that the cancellation was in violation of the principles of natural justice as they were unable to avail the opportunity of hearing extended for bonafide reasons. The third respondent recorded that the petitioner had filed a response on 17.04.2022 but had not responded to the Show Cause Notice dated 05.04.2022. The Court observed that if the petitioner can demonstrate bonafides, they should be given another opportunity of hearing to establish the same.

Appeal Rejection:
The petitioner preferred a first appeal stating that they could not appear for the personal hearing due to suffering from a lung disease and being advised bed rest, which affected their ability to file monthly returns. However, the appeal was rejected on the ground of limitation. The Court emphasized that a pedantic approach should not be taken and that the petitioner should be given a chance to demonstrate bonafides. The petitioner's reasons for non-appearance could be bonafide, and they should be granted another opportunity to be heard.

Court's Decision:
The Court allowed the petition in part, setting aside the cancellation order dated 19.04.2022 and restoring the proceedings to the third respondent for reconsideration in light of the Court's observations. The petitioner was directed to appear before the third respondent on 19.04.2023 without further notice. The Court emphasized the importance of giving the petitioner a fair opportunity to present their case and establish the bonafides of their reasons for non-appearance.