2024 (7) TMI 672 - HC - GST

Cancellation of registration of the petitioner - petitioner not filed any application for revocation of cancellation of registration - HELD THAT - Admittedly, during the period between 3rd February, 2022 and 30th July, 2023 the petitioner was in jail custody. The show-cause was issued on 27th July, 2023 and order of cancellation of petitioner s registration was passed on 23rd August, 2022. The petitioner had no opportunity either, to respond to the show-cause or to prefer an application for revocation of the order of cancellation. From the certificate issued by the Superintendent, Raiganj District Correctional Home dated 27th July, 2023 it would appear that the petitioner had been released pursuant to his acquittal on 20th July, 2023. Thereafter, the petitioner had preferred an appeal. The order dated 23rd August, 2022 cancelling the petitioner s registration and the order dated 13th March, 2024 passed by the appellate authority under the said Act, is set aside, subject to the conditions that the petitioner files his returns for the entire period of default and pays requisite amount of tax and interest and fine, late fees and penalty, if not already paid. Petition disposed off.

Summary

Issues:
Challenge to show-cause notice and cancellation of registration under Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017.

Analysis:
The petitioner, engaged in selling medicines, challenged a show-cause notice and the subsequent cancellation of registration by the appellate authority under the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017. The petitioner was arrested in connection with a case under the Narcotic Drugs and Psychotropic Substances Act, 1985, but was later acquitted. The petitioner, who was in jail custody for over a year, could not apply for revocation of the registration cancellation during that time. The appellate authority rejected the appeal on the ground of non-filing of an application for revocation. The petitioner contended that the appellate authority's decision was mechanical and did not consider the circumstances preventing the petitioner from operating the business.

The court noted that the petitioner was in jail custody during the period when the show-cause notice was issued and the registration cancellation order was passed. The petitioner was released after acquittal and then filed an appeal, which was rejected for not applying for revocation. The court observed that the appellate authority's decision lacked proper consideration of the petitioner's situation. It was highlighted that the allegation was not tax evasion but non-functioning due to the petitioner's incarceration. Referring to a previous case, the court emphasized the importance of the registered taxpayer fulfilling certain conditions for registration restoration after cancellation.

In line with the previous case's direction, the court set aside the registration cancellation order and the appellate authority's decision, subject to the petitioner filing returns for the default period, paying the necessary tax, interest, fines, late fees, and penalties. The court specified a timeline for compliance, stating that failure to meet the conditions would result in the dismissal of the writ petition. The respondents were directed to enable the petitioner to fulfill the compliance requirements promptly. The court disposed of the writ petition without costs, instructing all parties to act based on the official copy of the order downloaded from the court's website.