2023 (10) TMI 929 - HC - GST

Rejection of application for revocation of cancelled GST registration - Ex-parte order - HELD THAT - This Court in TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. 2022 (2) TMI 933 - MADRAS HIGH COURT wherein it was held that no useful purpose would be served keeping the petitioners out of the Goods and Service Tax regime as such the assessee would still continue to his businesses and supply goods and services. The Central Goods and Service Act was enacted in the year 2017 with an object of levy and collection of tax on intra state supply of goods or services or both by the Central Government, it is not the interest of the government to curtail the right of the entrepreneurs like the petitioner. The petitioner must be allowed to continue his business and to contribute to the State's revenue, in the absence of GST Registration number a professional cannot raise a bill, if the petitioner is denied a GST registration number, it affects his chances of getting employment or executing works, which ultimately affects his right to livelihood, embodied under Article 21 of the Constitution. The object of any Government is to promote the trade and not to curtail the same. The method which is adopted by the department as on today is like strangulating the neck of the small scale entrepreneurs. The cancellation of registration certainly amounts to a capital punishment so for as the traders are concerned. If they are not filing an appeal within the statutory period, then his entire business comes to stance - the department of GST has to think of the consequences and relax the rules and also find the modalities of conveying the show cause notice by way of SMS and also in the regional languages. This court expects the department of GST to take appropriate action by amending the relevant provisions considering the consequences on traders. These writ petitions are disposed of in terms of the guidelines provided in the order in Suguna Cutpiece 's case - Petition closed.

Summary

Issues Involved:
1. Cancellation of GST Registration
2. Non-filing of GST returns due to Covid-19
3. Rejection of application for revocation
4. Limitation period for filing an appeal
5. Right to livelihood under Article 21 of the Constitution

Summary:

Issue 1: Cancellation of GST Registration
The petitioner, a vegetable exporter, challenged the cancellation of his GSTN Registration No. 33ANLPM1250C1ZI by the respondent through an order dated 25.06.2020. The respondent argued that the petitioner was given sufficient opportunities to respond to the show cause notice issued on 09.01.2020 but failed to do so, leading to the cancellation under the GST Act.

Issue 2: Non-filing of GST returns due to Covid-19
The petitioner claimed that his part-time accountant contracted Covid-19, resulting in the non-filing of GST returns for six months. This situation led to the cancellation of his GST registration, severely affecting his business and livelihood.

Issue 3: Rejection of application for revocation
The petitioner filed an application for the revocation of the cancellation order, which was rejected on 20.11.2020. The petitioner contended that the GST portal did not accept his appeal due to the statutory limitation period prescribed under the Act.

Issue 4: Limitation period for filing an appeal
The respondent maintained that the petitioner failed to file an appeal within the prescribed limitation period under Section 107(4) of the GST Act. The court noted that similar issues had been addressed by other High Courts, emphasizing that the stringent provisions of the GST Act should not deny the right to carry on trade and commerce.

Issue 5: Right to livelihood under Article 21 of the Constitution
The court referred to judgments from the Bombay High Court, Uttarakhand High Court, and Supreme Court, highlighting that the right to livelihood is protected under Article 21 of the Constitution. The court observed that denying GST registration affects the petitioner's right to livelihood and that the GST provisions should facilitate, not hinder, business operations.

Conclusion:
The court concluded that the cancellation of GST registration amounts to a capital punishment for traders, especially small-scale entrepreneurs. The court directed the respondents to allow the petitioner to file returns and pay dues to revive his GST registration. The court also emphasized the need for the GST department to issue notices in regional languages and through SMS to ensure better compliance. The writ petition was disposed of in terms of the guidelines provided in the Suguna Cutpiece case, with no costs. The Registry was directed to mark a copy of the order to the Principal Chief Commissioner of GST & Central Excise, Tamil Nadu & Puducherry.