2024 (9) TMI 392 - HC - GST

Cancellation of registration of the petitioner under the Central Goods and Services Tax Act, 2017 and the West Bengal Goods and Services Tax Act, 2017 - Failure to comply with the statutory provisions - HELD THAT - It is found that the registration of the petitioner had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had been adopting dubious process to evade tax. Taking note of the fact that the suspension/revocation of license would be counterproductive and works against the interest of the revenue since, the petitioner in such a case would not be able to carry on his business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax, the respondents should take a pragmatic view in the matter and permit the petitioner to carry on his business. The order dated 24th August, 2022 cancelling the registration of the petitioner set aside subject to the condition that the petitioner files his returns for the entire period of default and pays requisite amount of tax and interest and fine and penalty, if not already paid - petition disposed off.

Summary

Issues:
Challenge to cancellation of registration under Central Goods and Services Tax Act, 2017 and West Bengal Goods and Services Tax Act, 2017.

Analysis:
The petitioner filed a writ application challenging the cancellation of registration under the Central Goods and Services Tax Act, 2017 and the West Bengal Goods and Services Tax Act, 2017. The petitioner was issued a show cause notice for failing to file returns for six months. The petitioner's advocate argued that the petitioner intended to comply with the Act but failed to respond to the notice. Reference was made to a previous judgment where a similar cancellation was set aside upon fulfilling certain conditions. The respondent authorities contended that the cancellation was justified due to the petitioner's non-compliance with statutory provisions.

The court noted that the cancellation was based on non-filing of returns and not on tax evasion. It recognized that suspending or revoking the registration would hinder revenue recovery as the petitioner would be unable to conduct business. The court opined that a pragmatic approach should be taken, allowing the petitioner to continue business upon fulfilling necessary conditions. The respondents stated that final liability determination required the petitioner to file returns.

Based on the above considerations and a previous court directive, the court proposed setting aside the cancellation order, subject to the petitioner filing returns for the default period and paying the required tax, interest, fine, and penalty. The court directed the respondents to activate the portal for compliance within a week. Failure to meet the conditions within four weeks would result in dismissal of the petition. The judgment was issued without costs, and parties were instructed to act based on the official copy downloaded from the court's website. Photostat copies were to be provided upon request.