Shubham Kumar vs. The Commissioner Of Customs, Central GST And Central Excise

Held

The Court held that the petitioner had provided reasons for not responding to the show cause notice and for failing to appear at the hearing, attributing it to illness. The Court found that only one notice was sent to the petitioner, to which he could not respond due to his circumstances. It was of the view that an adequate opportunity of hearing was required to be given by fixing another date, which was not done. The impugned order of cancellation dated March 10, 2023, was set aside. The respondents were directed to grant the petitioner an opportunity to file his response to the show cause notice and provide a hearing. The competent authority was directed to examine the petitioner's claim of filing a return on April 15, 2023, and consider it if found true. If the return was not filed, the authority could consider permitting the petitioner to file it, along with taxes, penalty, and fine. The entire exercise was to be completed within three months. The Court found that the petitioner's claim of filing a return 'for the period before the registration was cancelled' was not to be understood in the manner interpreted by the respondents.

Facts

The petitioner, Shubham Kumar, failed to file GST returns for six months, leading to a show cause notice under Rule 22(1)/sub-rule (2A) of Rule 21A. The petitioner claims illness (Jaundice and internal fever) prevented him from responding to the notice or appearing for a hearing. Consequently, Respondent No. 2 passed a suo motu order on March 10, 2023, cancelling the petitioner's registration effective from that date. The petitioner states he filed a return on April 15, 2023, for the period prior to cancellation. Respondent No. 1 dismissed the petitioner's appeal against the cancellation order, citing delay and the contradictory claim of filing a return after cancellation. The appeal was dismissed by Respondent No. 1 on September 18, 2023, confirming the order of Respondent No. 2.

Key Issues

1. Whether the order cancelling the petitioner's GST registration, passed by Respondent No. 2 on March 10, 2023, and confirmed by Respondent No. 1 on September 18, 2023, is sustainable in law, considering the petitioner's claim of illness and inability to respond to the show cause notice and attend the hearing, and whether an adequate opportunity of hearing was provided, as per the principles of natural justice? Petitioner's arguments: The petitioner contended that his illness prevented him from responding to the show cause notice and appearing for the hearing. He argued that the authorities should have provided him with another opportunity to present his case, especially since he had filed a return for the period before cancellation. He relied on the medical certificate submitted as Annexure 'P/1'. Respondents' arguments: The respondents argued that the petitioner did not respond to the show cause notice and no authorized representative acted on his behalf. They also contended that the appeal filed by the petitioner was presented beyond the prescribed limitation period under Section 107(94) of the CGST Act, 2017. Furthermore, they found the petitioner's claim of filing a return on April 15, 2023, contradictory to the cancellation of registration on March 10, 2023.