Gauhati High Court
Motaleb Bhuyan vs The State Of Assam And 3 Ors on 11 March, 2025
Author: Devashis Baruah
Bench: Devashis Baruah
Page No.# 1/29
GAHC010083412024
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/2244/2024
MOTALEB BHUYAN
S/O- LATE IBRAHIM BHUYAN,
PROPRIETOR, HAVING ITS OFFICE AT GURUNANAK NAGAR, NORTH
BONGAIGAON, BONGAIGAON, ASSAM, PIN-783380
VERSUS
THE STATE OF ASSAM AND 3 ORS
REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE GOVT.
OF ASSAM, FINANCE AND TAXATION DEPARTMENT, DISPUR GUWAHATI
06, ASSAM
2:THE COMMISSIONER OF STATE TAXES
ASSAM
KAR BHAWAN
DISPUR
GUWAHATI-06
3:THE JOINT COMMISSIONER OF STATE TAXES (APPEALS)
ASSAM
KAR BHAWAN
DISPUR
GUWAHATI-06
4:THE ASSISTANT COMMISSIONER OF STATE TAXES
BONGAIGAON-01
BONGAIGAON DHUBRI ZONE
BONGAIGAO
Advocate for the Petitioner : DR ANKIT TODI, MR. D DUTTA,MS M PARBIN,MS S
JITANI,MR A NATH,DR B P TODI
Page No.# 2/29
Advocate for the Respondent : SC, FINANCE AND TAXATION,
Linked Case : WP(C)/3683/2024
M/S C ZAR TECHNOLOGIES AND ANR
A PARTNERSHIP FIRM HAVING ITS REGISTERED OFFICE AT HOUSE NO.77
WALTAS LANE
NOTUN SARANIYA
GUWAHATI
KAMRUP METRO
REPRESENTED THE PETITIONER NO.2
2: SRI ABHILASH BAROOAH
SON OF LATE CHANDAN BAROOAH B1
RADHAKUNJ APARTMENT
LAXMINAGAR
RGB ROAD
GUWAHATI
KAMRUP METRO
ASSAM- 781005
VERSUS
THE STATE OF ASSAM AND 3 ORS
COMMISSIONER AND SECRETARY TO THE GOVERNMENT OF ASSAM
FINANCE DEPARTMENT
DISPUR
ASSAM
2:THE COMMISSIONER AND STATE GOODS AND SERVICE TAX
GUWAHATI
KAR BHAWAN
GANESHGURI
DISPUR
GUWAHATI- 781006
ASSAM
3:THE ASSISTANT COMMISSIONER OF STATE TAX
GUWAHATI C-4
KAR BHAWAN
GUWAHATI-06
ASSAM
4:JURISDICATION OFFICER
GUWAAHATI-C-4
Page No.# 3/29
GUWAHATI-C
KAR BHAWAN
GUWAHATI-06
ASSAM
------------
Advocate for : MR. R S MISHRA
Advocate for : SC
FINANCE AND TAXATION appearing for THE STATE OF ASSAM AND 3 ORS
Linked Case : WP(C)/2695/2024
KAMAIAH ENGINEERING SERVICES PRIVATE LIMITED (OPC)
2ND FLOOR
EPITOME BUILDING
G.N.B. ROAD
SILPUKHURI
KAMRUP (M)
GUWAHATI
ASSAM- 781003
REPRESENTED BY ITS DIRECTOR SHRI KODA SUDHAKAR RAO
VERSUS
THE STATE OF ASSAM AND 3 ORS
THROUGH THE COMMISSIONER AND SECRETARY TO THE GOVT OF ASSAM
MINISTRY OF FINANCE AND TAXATION
KAR BHAWAN
GANESHGURI
GUWAHATI ASSAM
2:THE PRINCIPAL COMMISSIONER OF STATE TAXES
ASSAM
ASSAM
KAR BHAWAN
G.S.ROAD
DISPUR
GUWAHATI-06
3:THE JOINT COMMISSIONER OF STATE TAXES (APPEALS)
GUWAHATI
KAR BHAWAN
DISPUR
GUWAHATI
ASSAM-6
Page No.# 4/29
4:THE COMMERCIAL TAX OFFICER (SUPERINTENDENT OF TAXES)
GUWAHATI-A-6
KAR BHAWAN
GUWAHATI-6
————
Advocate for : MS. M L GOPE
Advocate for : SC
FINANCE AND TAXATION appearing for THE STATE OF ASSAM AND 3 ORS
Linked Case : WP(C)/4500/2024
MONI KANTA DAS
SON OF LATE MOHAN CH. DAS
RESIDENT OF KATHALGURI VILLAGE NO.1
P.O.- NAGAJAN
P.S.- DULIAJAN
DIST.- DIBRUGARH
PIN- 786191.
VERSUS
UNION OF INDIA AND 3 ORS
REPRESENTED BY THE SECRETARY OF GOVERNMENT OF INDIA
MINISTRY OF FINANCE
NEW DELHI- 110001.
2:THE PRINCIPAL COMMISSIONER OF CENTRAL GOODS AND SERVICES
TAX
GST BHAWAN KEDAR ROAD
GUWAHATI- 781001.
3:THE ASSISTANT COMMISSIONER
CENTRAL GOODS AND SERVICE TAX
DIBRUGARH DIVISION DIBRUGARH.
PIN- 786001.
4:THE SUPERINTENDENT
CENTRAL GOODS AND SERVICES TAX
TINSUKIA ZONE
NAHARKATIA
Page No.# 5/29
DIST.- TINSUKIA
ASSAM.
PIN- 786610.
For the Petitioner(s) : Dr. B. P. Todi, Sr. Advocate
: Dr. A. Todi, Advocate
: Mr. N. Hawelia, Advocate
: Mr. A. Khanikar, Advocate
: Mr. R. S. Mishra, Advocate
For the Respondent(s) : Mr. S. C. Keyal, Standing Counsel
: Mr. B. Gogoi, Standing Counsel
Date of Hearing : 28.11.2024
Date of Judgment : 11.03.2025
BEFORE
HONOURABLE MR. JUSTICE DEVASHIS BARUAH
JUDGMENT AND ORDER (CAV)
Heard Dr. B. P. Todi, the learned Senior counsel assisted by Dr. A.
Todi, the learned counsel appearing on behalf of the petitioner in
WP(C) No.2244/2024; Ms. N. Hawelia, the learned counsel appearing
on behalf of the petitioner in WP(C) No.2695/2024; Mr. R. S. Mishra,
the learned counsel appearing on behalf of the petitioners in WP(C)
No.3683/2024 and Mr. A. Khanikar, the learned counsel appearing on
behalf of the petitioner in WP(C) No.4500/2024. I have also heard Mr.
S. C. Keyal, the learned Standing counsel appearing on behalf of the
CGST and Mr. B. Gogoi, the learned Standing counsel appearing on
behalf of the Finance and Taxation Department of the Government of
Assam.
2. The issues involved in the batch of 4 (four) writ petitions primarily
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related to the cancellation of the registrations under Central Goods and
Service Tax Act, 2017 and State Goods and Service Tax Act, 2017. The
question which arises for consideration before this Court is as to
whether this Court should interfere with the cancellation of the
registrations or in other words, revoke the cancellation of the
registrations in the respective facts of the cases before this Court.
Under such circumstances, it is relevant to narrate the relevant facts
which led to the filing of the instant batch of writ petitions before this
Court.
WP(C) No.2244/2024:
3. The petitioner herein claims to be a proprietor of a firm in the name
and style of M/S M. Bhuyan. The petitioner was registered under the
provisions of the Central Goods and Service Tax Act, 2017 (for short
‘the Central Act’) and was issued a certificate of registration on
20.09.2017. The petitioner was also granted a Registration Number
bearing No. 18AJBPB2744A1ZY.
4. It is the case of the petitioner that the petitioner is in the business of
contractual works of supplying of various products. A show cause
notice was issued for cancellation of the registration upon the
petitioner on 06.11.2019 asking the petitioner to submit a reply within
seven days from the date of service of the said notice. The said show
cause notice is enclosed as Annexure-2 to the writ petition and the
reason assigned therein “Any taxpayer other than composition
taxpayer has not filed returns for a continuous period of six months”.
The petitioner claims that there was no personal notice issued to the
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petitioner and was simply uploaded in the website by the Proper
Officer. It is the further case of the petitioner that the petitioner having
no proper notice, did not submit any reply.
5. Subsequent thereto, on 18.11.2019, the registration of the petitioner
was cancelled. The cancellation of the registration has been enclosed
as Annexure-3 to the writ petition. It is relevant to take note of that a
perusal of the said order for cancellation of registration refers to two
contradictory aspects. One, there is a reply submitted by petitioner on
17.11.2019 and the other that there is no reply to the said show cause
notice. Apart from that there is no other reason assigned.
6. It is the case of a petitioner that the petitioner came to learn about the
suspension and cancellation of its registration in the month of
February, 2021 inasmuch as, it is the further case of the petitioner that
for the period from November, 2019 on account of financial constraint
and also due to the COVID-19 pandemic, he could not coordinate with
his tax consultant. Be that as it may, the petitioner could file his return
in Form GSTR-1 on 24.03.2021 but the Petitioner was unable to pay
the due taxes due to the ongoing financial constraint. The petitioner
further states that the petitioner had filed and updated his due return
in GSTR-3B on 09.03.2024 for the month of November, 2019 and paid
taxes for the period till November, 2019. Be that as it may, as the
period seeking revocation under Section 30 of the Assam Goods and
Service Tax Act, 2017 (for short ‘the State Act’) had expired, the
petitioner preferred an Appeal under Section 107 of the State Act read
with Rule 108(3) of the Assam Goods and Service Tax Rules, 2017
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(hereinafter referred to as the ‘State Rules’). The said Appeal upon
being filed was registered and numbered as FORM GST APL-01 on
12.03.2024. The said appeal was rejected by the Appellate Authority
i.e. the Joint Commissioner of State Taxes Appeals vide an order dated
06.04.2024 on the ground of delay and it is under such circumstances,
the petitioner had approached this Court by filing the present petition.
7. It is seen that this Court issued notice on 29.04.2024. It is irrelevant to
take note of that on 11.09.2024, an affidavit-in-opposition was filed by
the Commissioner of Taxes, Assam through the Joint Commissioner of
Taxes, Assam. In the said affidavit-in-opposition, it was mentioned that
the order against which the appeal was preferred was passed on
18.11.2019 and the appeal having been filed after four years on
12.03.2024, the Appellate Authority could not have condoned the delay
even if satisfied with the grounds in view of Section 107(4) of the State
Act. It was also mentioned that if the petitioner was continuing with
his business, he should close the earlier registration by filing the final
return as per the provisions of the State Act by paying all his dues as
per the return and thereafter obtain fresh registration.
8. To the said affidavit-in-opposition, an affidavit-in-reply was submitted
wherein at paragraph No.8, it was categorically mentioned that in the
event the Registration Certificate is not restored, the petitioner would
be denied of his right to livelihood which would be in violation to
Article 21 of the Constitution. It was further mentioned that there is no
provision under the Central Act as well as the State Act for re-
application of a fresh Registration Certificate and in absence of a
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Registration Certificate, the petitioner would not be able to raise any
bills/invoices or enter into any contractual works which would affect
the right of the petitioner to earn a livelihood. Additionally, it was
mentioned that even if there is a new registration, the petitioner would
be denied the Input Tax Credit which is available and accumulated
under the present cancelled registration certificate.
WP(C) No.2695/2024:
9. The petitioner herein is an OPC Company which is duly registered
under the State Act and was issued a Registration Certificate bearing
Registration No.18AAGCK0367D1ZP. The said registration was issued
on the 26.09.2017. It is the case of the petitioner that the petitioner
was regularly filing its returns under the respective provisions of the
Central Act and State Act. There was no difficulty in the filing of the
returns till the year 2020. However, on account of the COVID-19
pandemic, the parents of the tax consultant of the petitioner namely
Shri Dibyajyoti Das had expired. The petitioner though had remitted
the amounts to the consultant but the consultant did not take any
steps for filing of the returns. In that regard, the petitioner has
enclosed the documents evidencing payment of the amounts to the
consultant as Annexure-II (series). Be that as it may, as there was no
returns filed by the consultant, it was shown in the GSTN portal
account of the petitioner that the show cause notice was issued on
29.06.2021. The petitioner could not however download the said show
cause notice and the petitioner further avers in the writ petition that till
the date of filing of the writ petition, the petitioner was not in a
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position to download the said show cause notice. A screenshot of the
downloaded portal showing the issuance of a show cause notice dated
29.06.2021 is enclosed as Annexure-III. Thereupon, on 17.07.2021,
the Proper Officer issued an order thereby cancelling the GST
Registration of the petitioner. It is the case of the petitioner that from a
perusal of the said order dated 17.07.2021, it would be seen that there
was no due payable by the petitioner.
10. The order of cancellation was enclosed as Annexure-IV to the writ
petition. A perusal of the order dated 17.07.2021 would show that a
contradictory stand was taken. On one hand it has been mentioned
that there is a reply submitted by the petitioner on 08.07.2021 and on
the other hand, it has been mentioned that there is no reply submitted
to the show cause notice dated 29.06.2021. No other reasons assigned
as regards cancellation.
11. The petitioner thereupon filed an appeal by engaging a different
consultant taking into account that the earlier consultant did not take
any steps. The Appeal was registered and numbered as GST APL-01.
The appeal was however dismissed vide an order dated 25.04.2024 on
the ground that the said appeal was filed beyond the period of
limitation and it is under such circumstances, the petitioner has
approached this Court by filing the present writ petition.
12. This Court duly takes note of the fact that pursuant to the filing of the
instant writ petition, on 28.06.2024 notice was issued. The record
reveals that an affidavit-in-opposition was filed by the Commissioner of
Taxes through the Joint Commission of Taxes, Assam. In the said
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affidavit-in-opposition, it was mentioned that as the petitioner did not
furnish returns and paid the due taxes to the State for more than six
months, the show cause notice was issued on 29.06.2021. It was
further mentioned that show cause notices are issued under the GST
regime through the portal only without any interface with the taxpayer.
However, the petitioner neither paid the tax nor furnished the reply to
the show cause notice within the stipulated time and as such, its
registration was cancelled on 17.07.2021. Further to that, the petitioner
did not take any steps for revival. The Appeal which was filed was also
delayed by more than two years and such period cannot be condoned
in terms with Sub-Section (1) and Sub-Section (4) of Section 107 of
the State Act by the Appellate Authority. It was further mentioned that
the petitioner therefore should close the earlier registration by filing the
return as per the provisions of the State Act by paying all its dues and
thereafter obtain a fresh registration and in that process, the provisions
of the State Act would not be violated and the Government would get
due revenue from the petitioner.
13. No reply was filed to the said affidavit-in-opposition by the petitioner.
WP(C) No.3683/2024:
14. The petitioner No.1 herein is a partnership firm and the petitioner No.2
is one of the partners. The petitioner No.1 is an assessee registered
under the State Act bearing Registration No. 18AAEFC7833K3Z3. The
said registration was issued on 25.09.2017 in favour of the petitioner
No.1. During the period of COVID-19 pandemic, a show cause notice
was issued to the petitioner No.1 on 11.02.2021 by the Proper Officer.
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The said show cause notice has been enclosed as Annexure-B to the
writ petition. The reason cited in the said show cause notice is “Any
taxpayer other than composition taxpayer has not filed returns for a
continuous period of six months”. The petitioner No.1 was asked to
submit its reply within 30 days from the date of service of the said
notice and further, a date of hearing was fixed on 22.03.2021 at 11
AM.
15. Similar to the earlier two writ petition being WP(C) No.2244/2024 and
WP(C) No.2695/2024, an order was passed on 23.03.2021 by the
Proper Officer wherein contradictory aspects were mentioned to the
effect that the petitioner No.1 had submitted a reply on 23.03.2021 as
well as the petitioner No.1 had not submitted any reply to the show
cause notice. There is no reasons assigned in the order for cancellation
of the registration. Be it as it may, it is the case of the petitioners that
at that relevant time, as COVID-19 pandemic restrictions were going
on, the office of the petitioners was closed and the petitioner No.2
could not visit the GST portal. It is the further case of the petitioners
that the petitioners post the COVID-19 pandemic, arranged funds and
filed their returns up to March, 2021 as allowed by the GST portal.
16. It is also the case of the petitioners that while updating the returns, the
petitioners have deposited an amount of Rs. 12,00,190/- towards tax
and late fees. It is seen that these returns were filed on 05.07.2024 as
would appear from Annexure-D (Colly). The petitioners thereupon tried
to file an application for revocation of the cancellation of the
registration but when such attempts were made, it was shown in the
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portal screen that the timeline of 270 days from the date of
cancellation of the order provided to the taxpayer to file their
application for Revocation of Cancellation had expired. The petitioners
initially thought of filing an Appeal in terms with Section 107 of the
Central Act but taking into account the provisions of Sub-Section (1)
and Sub-Section (4) of Section 107 of the Central Act, filing of an
appeal would not be an alternative and efficacious remedy, for which
the petitioners have approached this Court.
17. This Court by an order dated 26.07.2024 issued notice. Pursuant
thereto, an affidavit-in-opposition was filed by the respondent No.2
wherein it was mentioned that as the petitioners did not furnish any
returns due to the State for more than six years, the show cause notice
was issued on 11.02.2021. It was mentioned that the petitioners then
also did not pay the tax and also did not submitted the reply to the
show cause notice and it was under such circumstances, the
registration was cancelled on the 23.03.2021. It was further mentioned
that though the registration was cancelled on 23.03.2021, the
Petitioners continued to do its business without taking any recourse to
revive its registration and also not depositing the due tax to the State
Exchequer. It was also mentioned that the petitioners have approached
this Court in the year 2024 i.e. after three years from the cancellation
of the registration and under such circumstances, the petitioners ought
to close down its earlier registration by filing final return as per the
provisions of the State Act by paying all their dues in the said return
and thereafter obtain fresh registration.
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18. To the said affidavit-in-opposition, a reply was filed by the petitioners
on 26.09.2024 wherein it was mentioned that the petitioners had
already complied with all its defaults and have made payment of GST
amount by filing GST returns till March, 2021 as allowed by the GST
portal and is ready and willing to pay any amount which is legally
payable on the part of the petitioners. It was further stated by the
petitioners in the affidavit-in-reply that as the GST Registration Number
of the Petitioner No.1 is already available with the existing vendors and
the parties with whom the Petitioner No.1 had earlier conducted
business transactions and also intended to conduct future business
transactions after the revival of the GST registration, it would cause
great inconvenience if the GST registration is not revived. It was
further stated that it would not prejudice the Government rather, if the
cancellation of the GST registration is revoked, the petitioners would
have to file their return from April, 2021 to till date for which the State
Exchequer would be getting the revenue as well as the late fees.
WP(C) No.4500/2024:
19. The petitioner herein is in the business of execution of maintenance
work contract with the Oil India, Duliajan and in that regard, his firm in
the name and style of “Moni Kanta Das” was registered under the
Central Act bearing Registration No.18ADPFS9101C1Z0 and the
registration certificate was issued on 18.05.2018. It is the further case
of the petitioner that the petitioner continued to file his returns in due
time. However, on 05.01.2021, a show cause notice was issued by the
Proper Officer whereby the petitioner was asked to submit the reply
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within seven days from the date of service of the said notice.
20. It is the further case of the Petitioner that he did not submit a reply as
he was not much conversant with the online procedure. Be that as it
may, on 10.02.2021, the registration of the petitioner was cancelled. In
this case also, the order of cancellation refers to a reply dated
17.01.2021 filed by the petitioner and it was further mentioned that
upon examination of the reply by the petitioner and the submissions
made at the time of hearing, the registration was cancelled for returns
having not been filed. The petitioner on account of the COVID-19
pandemic could not take further steps. However, subsequently on
29.07.2024, the petitioner submitted his returns up to February, 2021
as was allowed by the GST portal.
21. Pursuant to the filing of the returns, the petitioner tried to take steps
for revocation of the cancellation of the registration which was not
permitted for the reason that the timeline of 270 days from the date of
cancellation order provided to the taxpayer to file application for
revocation of cancellation had expired. The petitioner had not filed any
Appeal on the ground that as the period for filing of the Appeal and the
maximum period that can be condoned had expired in terms with
Section 107 of the Central Act, the Appeal, if filed by the Petitioner
cannot be taken up on merits. As such, the Petitioner has approached
this Court by filing the instant writ petition.
22. It is seen that this Court vide an order dated 06.09.2024 issued notice.
The respondents have not filed their affidavit till the time the matter
was taken up for hearing.
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23. This Court had heard the learned counsels for the petitioners and
perused the materials. The submissions so made by the learned
counsels are in terms with the pleaded case of both the parties and as
such for the sake of brevity, this Court is not repeating the same.
ANALYSIS AND DETERMINATION :
24. In the backdrop of the above, the question which arises as to whether
this Court should exercise its jurisdiction under Article 226 of the
Constitution to interfere with the orders of cancellation of the
registration. To decide the said aspect of the matter, it is therefore
relevant to take note of some of the provisions of the Central Act which
are pari materia to the State Act as well as the Rules framed therein
under.
25. Chapter-VI of the Central Act specifically deals with Registration.
Section 22 and 24 of the Central Act stipulates the categories of
persons who are liable to be registered. Section 23 refers to those
category of persons who are not liable to be registered. Section 25
stipulates the procedure for registration.
26. It is relevant to take note of that Sub-Section (1) to Sub-Section (7) of
Section 25 of the Central Act which deals specifically with the
procedure as to when a person is liable to be registered under Section
22 or 24 applies for registration. However, Sub-Section (8) of Section
25 is very relevant inasmuch as, if a person who is liable to be
registered under Section 22 and 24 fails to obtain registration, the
Proper Officer may, without prejudice to any action which may be
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taken under the Act or under any other law for the time being in force,
proceed to register such person in such manner as may be prescribed.
27. The prescription is in Rule 16 of the Central Goods and Service Tax
Rules, 2017 (for short ‘the Central Rules’). This aspect is important,
taking into account that if a person falls within the categories
mentioned in Section 22 and 24 of the Central Act, even if he fails to
obtain registration, can be suo moto registered by the Proper Officer by
following the mandate of Section 25(8) read with Rule 16 of the
Central Rules.
28. This Court further finds it relevant to take note of Section 122 of the
Central Act and more particularly Clause – (xi), which stipulates that
when a taxable person who is liable to be registered under the Act but
fails to obtain registration, he is liable to pay a penalty as stipulated in
the said Section.
29. The combine reading of Sections 22, 24, 25 and 122 of the Central Act
is that the person who is categorized in Sections 22 and 24 is
compulsorily liable to be registered in the manner stipulated in Section
25 of the Central Act. It is further seen that if a person is not
registered, the Proper Officer can suo moto register him by following
the mandate of Rule 16 of the Central Rules. Additionally, Section 122
imposes penalty, if a person fails to obtain registration.
30. It is relevant to take note of Section 29 which relates to cancellation or
suspension of registration. Sub-Section (1) and Sub-Section (2) of
Section 29 of the Central Act stipulates the different conditions when
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the Proper Officer can exercise its power to cancel a registration. The
present case falls within Sub-Section (2) of Section 29. The said Sub-
Section (2) of Section 29 of the Central Act is reproduced herein under:
“29.(2) The proper officer may cancel the registration of a person from such
date, including any retrospective date, as he may deem fit, where – (Refer to
Rules 21, 21A & 22)
(a) a registered person has contravened such provisions of the Act or
the rules made thereunder as may be prescribed; or
(b) a person paying tax under section 10 has not furnished [the return
for a financial year beyond three months from the due date of furnishing
the said return]; or
(c) any registered person, other than a person specified in clause (b),
has not furnished returns for [such continuous tax period as may be
prescribed]; or
(d) any person who has taken voluntary registration under sub-section
(3) of section 25 has not commenced business within six months from the
date of registration; or
(e) registration has been obtained by means of fraud, willful
misstatement or suppression of facts:
Provided that the proper officer shall not cancel the registration without giving the
person an opportunity of being heard.
[Provided further that during pendency of the proceedings relating to cancellation
of registration, the proper officer may suspend the registration for such period and
in such manner as may be prescribed]”
31. It would be seen from the above quoted Sub-Section that a Proper
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Officer may cancel the registration of a person from such date
including any retrospective date as he may deem fit when any of the
conditions stipulated in Sub-Clauses (a) to (e) are satisfied. However,
to exercise the said power, the Proper Officer is required to give an
opportunity of hearing to the person.
32. At this stage, it is further relevant to take note of that the Proper
Officer in order to cancel the registration has to take note of the
procedure as stipulated in Rule 22 which stipulates that the Proper
Officer shall issue a notice to such person in FORM GST REG-17
requiring him to show cause within a period of seven working days
from the date of service of such notice as to why his registration should
not be cancelled. This Court duly takes note of the FORM GST REG-7
which is a statutory form. The proforma notice as it appears, stipulates
that the Proper Officer has information which had come to his notice
that the registration is liable to be cancelled for the reasons to be
categorically specified. The Proper Officer thereupon has to give an
opportunity to furnish a reply within the period of seven working days
from the date of service of the notice and further fix a date for
appearance before him.
33. It is further seen that the reply to the show cause notice has to be
submitted in FORM GST REG-18. The order to be passed if the
registration is to be cancelled is in FORM GST REG-19 within 30 days
from the date of reply to the show cause notice and further the Proper
Officer has to determine the tax, interest or penalty including the
amount liable to be paid under Sub-Section (5) of Section 29 of the
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Central Act in the said order to be passed in FORM GST REG-19.
34. It is further relevant to take note of Sub-Rule (4) of Rule 22, which
stipulates that if the reply so submitted is found satisfactory, the Proper
Officer shall drop the proceedings and pass an order in FORM GST
REG-20. The proviso to Sub-Rule (4) of Rule 22 further stipulates that
where the person, instead of replying to the notice served under Sub-
Rule (1) for contravention of the provisions contained in Clause (b) or
(c) of Sub-Section (2) of Section 29, furnishes all the pending returns
and make full payment of tax dues along with applicable interest and
late fee, the Proper Officer shall drop the proceeding and pass an order
in FORM GST REG-20.
35. This Court further finds it relevant to take note of Sub-Section (3) of
Section 29 which stipulates that the cancellation of the registration
under Section 29 shall not affect the liability of the person to pay tax
and other dues under the Act or to discharge any obligations under the
Act or the Rules made thereunder for any period prior to the date of
cancellation, whether or not such tax or other dues are determined
before or after the date of cancellation.
36. Therefore, from a conjoint reading of Section 29 with Rule 22 and the
FORMS GST REG-17, GST REG-18, GST REG-19 and GST REG-20 would
show that the Proper Officer can cancel the registration under Sub-
Section (2) of Section 29 only on the grounds stipulated in Sub-Clauses
(a) to (e) of Section 29(2) and before doing so, an opportunity of
hearing has to be given to the person. Sub-Section (3) of Section 29
further stipulates that till the date of cancellation of the registration,
Page No.# 21/29
the person in whose favour the registration was, has to pay tax and
other dues under the Act or to discharge any obligations under the Act
or the Rules made thereunder. It would also transpire from a reading of
Rule 22 of the Central Rules that not only show cause notice is
required to be issued in the format as stipulated in FORM GST REG-17
but also a date of hearing is required to be fixed. Therefore, it would
be seen that the opportunity which is to be granted has to be an
opportunity in real sense and not a mere formality. Further to that, it is
a well settled principle of law that when a show cause notice is issued,
the show cause notice has to specify clearly and without any ambiguity
the reasons as to why the show cause notice have been issued in
terms with FORM GST REG-17. It is trite that if the said show cause
notice is vague, the very initiation of the proceedings on the basis of
the said show cause notice would become redundant. More so, when a
combine reading of the aforementioned provisions clearly stipulate that
the person has to be given an opportunity to be heard and this
opportunity of giving a hearing includes an issuance of a show cause
notice and a personal hearing.
37. It would further show from a further reading of Section 29 read with
Rule 22 of the Central Rules and the statutory form being FORM GST
REG-19 as it stood at the time when the impugned orders of
cancellation of the registration were passed that the order of
cancellation has clearly reflect the reason as to why the registration is
cancelled and further indicate to what amount of tax, interest and
penalty, etc., the person is liable prior to the date of cancellation of the
registration.
Page No.# 22/29
38. This Court further finds it relevant to take note of Section 30 of the Act
of the Central Act which deals with revocation of the cancellation of the
registration. Section 30 provides an avenue to the person whose
registration has been cancelled to seek revocation of the cancellation of
registration in the prescribed manner within 30 days from the date of
service of the cancellation order. This was the position prior to
01.10.2023 but subsequently with effect from 01.10.2023, the person
whose registration is cancelled may apply to such officer for revocation
of the cancellation of registration in such manner, within such time and
subject to such conditions and restrictions as may be prescribed. In the
instant batch of writ petitions, there was no application filed for
revocation in view of the mandate of Rule 23 as it stood post
01.10.2023 whereby it has been mandated that the period within
which such an application can be filed cannot be filed beyond 270
days. Under such circumstances, the avenue of revocation of the
cancellation of the registration certificate was not available to the
petitioners in the batch of writ petitions as no steps were taken within
the period of 270 days.
39. Be that as it may, this Court finds it very pertinent to take note of the
second and third proviso to Rule 23(1) of the Central Rules. The said
two provisos being relevant are reproduced herein under:
“Provided further that no application for revocation shall be filed, if the
registration has been cancelled for the failure of the registered person to
furnish returns, unless such returns are furnished and any amount due as
tax, in terms of such returns, has been paid along with any amount
payable towards interest, penalty and late fee in respect of the said
Page No.# 23/29returns:
Provided also that all returns due for the period from the date of the
order of cancellation of registration till the date of the order of revocation
of cancellation of registration shall be furnished by the said person within
a period of thirty days from the date of order of revocation of cancellation
of registration:”
40. The above quoted two provisos shows that a person can only file an
application seeking revocation if that person has furnished the returns
and paid any amount due as tax in terms of the returns, along with
amount payable towards interest and penalty and late fee in respect to
the said returns. In other words, the provision of revocation of
cancellation of a registration is only available when the person
concerned submits his returns and also pays the amount due as tax,
interest, penalty and late fee in respect to the such returns. The third
proviso to Rule 23(1) is also relevant inasmuch as it provides that all
returns due for the period from the date of order of cancellation of
registration till the date of the order of revocation of cancellation of
registration shall be furnished by the said person within a period of 30
days from the date of order of revocation of the cancellation of
registration. This third proviso to Rule 23(1) is relevant to be taken
note of inasmuch as in the event this Court observes that this is the fit
case for interference to the cancellation of the registration, this Court
would be required to pass appropriate orders to the effect that for the
period from the date of cancellation of the registration till the date of
revocation of the cancellation of the registration, the petitioners herein
would be liable to furnish all returns within a period of 30 days from
Page No.# 24/29
the date of revocation of the cancellation of the registration.
41. This Court further takes note of Section 107 of both the State Act and
the Central Act which stipulates that any person aggrieved by any
order passed under the State or the Central Act by an adjudicating
authority may appeal to such Appellate Authority as may be prescribed
within three months from the date on which the said decision or order
is communicated to such person. It is further seen from Sub-Section
(4) of Section 107 that the Appellate Authority had been only
empowered to condone the period by another one month and nothing
more.
42. In this context, it is relevant to take note of that in the instant batch of
petitions, two of the writ petitioners have preferred appeals and those
appeals have been dismissed by the Appellate Authority as the delay in
preferring the appeal is more than the period permitted under Section
107 to the Appellate Authority to condone the delay. It is the opinion of
this Court that the orders by which the Appellate Authority had rejected
the appeals in the case of two petitioners who have preferred the
appeals do not call for interference as they had exercised the power in
tune with Section 107 of the Central Act.
43. Be that as it may, the question arises in the instant proceedings as to
whether the impugned orders of cancellation of the registration were
bad in law and violated to the provisions of the Central Act or the State
Act or the Rules framed therein under.
44. In the foregoing paragraphs of the instant judgment, this Court has
Page No.# 25/29
duly taken note of the show cause notices which were issued. The said
show cause notices do not specifically state the reasons as to why the
Proper Officer was of the opinion that the registration of the petitioner
is required to be cancelled. There is no mention of the period when the
returns have not been filed. It appears from a perusal of the show
cause notices enclosed to the writ petitions except WP(C)
No.2695/2024 that the Proper Officer mechanically issued the said
show cause notice.
45. In the case of WP(C) No.2695/2024, the petitioner has specifically
averred that the petitioner could not access to the show cause notice
and the respondents have also not brought on record the said show
cause notice. Under such circumstances, this Court is of the opinion
that the show cause notices were vague. In that view of the matter, as
the show cause notices were vague, the orders by which the
registrations were cancelled cannot be sustained in law.
46. This Court has also perused the orders of cancellation impugned in the
present proceedings. It is also relevant to take note of that admittedly
the petitioners have not submitted any reply but most surprisingly the
Proper Officer referred in the impugned orders of cancellation of the
registration about replies being filed. In fact, the Proper Officer appears
to have been confused whether any reply has been filed or not. It
appears that the Proper Officer most mechanically passed the orders of
cancellation even without caring to the strike out the portion which was
not required in the statutory forum in FORM GST REG-19. In fact, it
surprises this Court as to how mechanically the jurisdiction was
Page No.# 26/29
exercised by the Proper Officer. It is trite principle of law that when a
jurisdiction is conferred upon the Authority with a specific mandate
how the jurisdiction is to be exercised and if the authority fails to
exercise his jurisdiction as per the stipulated mandate, it is to be
deemed that the said Authority had not exercised the jurisdiction at all.
47. Further to that, there is also no reason assigned for cancellation of the
registration in WP(C) No.2244/2024, WP(C) No.2695/2024 and WP(C)
No.3683/2024. However, in WP(C) No.4500/2024, there is a reason
assigned that returns were not filed. Be that as it may, taking into
account the perfunctory and mechanical manner in which the Proper
Officer has exercised his jurisdiction, this Court is of the opinion that
the orders of cancellation of the registration challenged in the batch of
writ petitions are required to be interfered with.
48. This Court cannot also be unmindful of the fact that the registrations
were cancelled in the cases of the petitioners herein sometime in the
years 2019 and 2021 and the petitioners have filed their returns for the
period prior to cancellation only in the year 2024. There are allegations
made by the respondents that the petitioners continued to run their
business in the meantime. In addition to that, this Court also takes
note of that these writ petitions were filed in the later part of 2024 i.e.
after almost three years and in respect to WP(C) No.2244/2024 after
five years.
49. This Court had in the previous segments of the instant judgment
referred to the third proviso to Rule 23(1) of the Central Rules which
categorically stipulates that upon revocation of the cancellation of
Page No.# 27/29
registration, the assessee is required to file his returns within 30 days
for the period from the date of cancellation to the date of revocation of
the cancellation. In view of this Court opinioning that the orders of
cancellation of registration are required to be interfered with, the
petitioners herein would now be required to file their annual returns for
the various financial years till date. This Court has also taken note of
the provisions of Section 73(10) of the Central Act/State Act which
stipulates that the Proper Officer can issue the order under Section
73(9) of the Central Act/State Act within 3 years from the due date for
furnishing the annual returns. It is also apposite to mention that in
terms with Section 73(2) of the Central Act/State Act, the Proper
Officer has to issue notice three months prior to the time limit specified
in Section 73(10) of the Central Act/State Act. Therefore, it is the
opinion of this Court that in order to balance the equities, it is required
that the date of furnishing the annual return be appropriately
extended. In that view of the matter, this Court declares that in respect
to the Petitioners in the present batch of writ petitions, the period for
submission of the annual returns would be the date of the instant
judgment except for the period 2024-2025 which would be in terms
with Section 44 of the Central Act/State Act.
50. In that view of the matter, the instant batch of writ petitions are
disposed off with the following observations and directions:
(i) The order of cancellation of registration dated 18.11.2019
challenged in WP(C) No.2244/2024 is set aside and quashed. The
petitioner herein is directed to file the returns for the period from
Page No.# 28/29the date of cancellation of the registration i.e. 18.11.2019 till date
within 30 days from the date of the instant judgment. The period
as stipulated in Section 73(10) of the Central Act/State Act shall
be computed from the date of the instant judgment except for
the financial year 2024-25 which shall be as per Section 44 of the
Central Act/State Act. The Petitioner herein shall also be liable to
make payment of the arrears i.e. tax, penalty, interest and late
fees.
(ii) The order of cancellation of registration dated 17.07.2021
challenged in WP(C) No.2695/2024 is set aside and quashed. The
petitioner herein is directed to file the returns for the period from
the date of cancellation of the registration i.e. 17.07.2021 till date
within 30 days from the date of the instant judgment. The period
as stipulated in Section 73(10) of the Central Act/State Act shall
be computed from the date of the instant judgment except for
the financial year 2024-25 which shall be as per Section 44 of the
Central Act/State Act. The Petitioner herein shall also be liable to
make payment of the arrears i.e. tax, penalty, interest and late
fees.
(iii) The order of cancellation of registration dated 23.03.2021
challenged in WP(C) No.3683/2024 is set aside and quashed. The
petitioners herein are directed to file the returns for the period
from the date of cancellation of the registration i.e. 23.03.2021
till date within 30 days from the date of the instant judgment.
The period as stipulated in Section 73(10) of the Central
Page No.# 29/29
Act/State Act shall be computed from the date of the instant
judgment except for the financial year 2024-25 which shall be as
per Section 44 of the Central Act/State Act. The Petitioners herein
shall also be liable to make payment of the arrears i.e. tax,
penalty, interest and late fees.
(iv) The order of cancellation of registration dated 10.02.2021
challenged in WP(C) No.4500/2024 is set aside and quashed. The
petitioner herein is directed to file the returns for the period from
the date of cancellation of the registration i.e. 10.02.2021 till date
within 30 days from the date of the instant judgment. The period
as stipulated in Section 73(10) of the Central Act/State Act shall
be computed from the date of the instant judgment except for
the financial year 2024-25 which shall be as per Section 44 of the
Central Act/State Act. The Petitioner herein shall also be liable to
make payment of the arrears i.e. tax, penalty, interest and late
fees.
JUDGE
Comparing Assistant