Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 14TH DAY OF FEBRUARY 2024 / 25TH MAGHA, 1945 WP(C) NO. 29825 OF 2023 PETITIONER:
SWARANJITHLAL C.S., AGED 52 YEARS, PROPRIETOR, M/S. CHENNATTU FUELS, KARUKACHAL, MANIMALA, KANGAZHA P. O., KOTTAYAM, PIN – 686541.
BY ADVS.
SRI. A.KUMAR SRI. P. J. ANILKUMAR SMT. G. MINI(1748) SRI. P. S. SREE PRASAD RESPONDENTS:
1 THE ASSISTANT COMMISSIONER CTO, II CIRCLE, CHANGANASSERY, KOTTAYAM, PIN – 686101.
2 THE COMMISSIONER GOODS & SERVICES TAX, TAX TOWER, KARAMANA (PO), TRIVANDRUM, PIN – 695001.
3 ADDL. R3.
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC), MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NEW DELHI – 110001.
[ADDITIONAL R3 IS IMPLEADED AS PER ORDER DATED 07.12.2023 IN I.A.1/2023 IN WP(C)].
BY ADV.
SRI. THOMAS MATHEW NELLIMOOTTIL – SR. SC – CBIC SMT. JASMINE M. M. - GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 29825 OF 2023 2 DINESH KUMAR SINGH, J.
-------------------------- W.P.(C) No. 29825 of 2023 ------------------------- Dated this the 14th day of February, 2024 JUDGMENT 1.
The petitioner is a petrol pump dealer who is registered under the provisions of the Kearla GST/CGST Act, 2017. The petitioner was issued a show cause notice in Exhibit P-1 for cancellation of the GST registration on the ground that petitioner has not filed return under Section 39 of the Central GST Act, 2017. One month time was granted to the petitioner for submitting the reply to the said Show Cause Notice and an opportunity of personal hearing was granted on 09.09.2022 at 11. 00 a.m. by the Jurisdictional Officer. The petitioner did not replied to the said Show Cause Notice. However, according to the petitioner, before the one month time period got expired, the petitioner filed the returns up to August, 2022 and remitted the tax and interest.
2.
Despite filing the returns, payment of tax and interest, the impugned order in Exhibit P-2 came to be passed cancelling the registration of the petitioner. Learned Counsel for the petitioner submits that proviso to Sub-Rule (4) of Rule 22 of the CGST Rules provides that if assessee files returns and pays tax, interest etc.
WP(C) NO. 29825 OF 2023 3 within the time granted in the show cause notice, the registration should not required to be cancelled. It is submitted that without taking note of the said provision of the Rules, the petitioner's registration has been cancelled and therefore, it is in violation of the statutory prescription and liable to be set aside.
3.
The learned Senior Standing Counsel for CBIC does not dispute the Rule provision. He submits that if a dealer files return and pays the tax, interest and penalty, the registration ought not be cancelled, which is the explicit provision of Sub-Rule(4) of Rule 22 of the CGST Rules. Rule 22 of the CGST Rules is extracted hereunder;
Rule 22. Cancellation of registration. - “(1) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29, he 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 the service of such notice, as to why his registration shall not be cancelled.
(2) The reply to the show cause notice issued under sub-rule (1) shall be furnished in FORM REG - 18 within the period specified in the said sub-rule.
(3) Where a person who has submitted an application for cancellation of his registration is
WP(C) NO. 29825 OF 2023 4 no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG- 19, within a period of thirty days from the date of application submitted under rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1), [or under sub-rule (2A) of rule 21A] cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29.
(4) Where the reply furnished under sub-rule (2) [or in response to the notice issued under sub- rule(2A) of rule 21A] is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST – REG 20.
Provided 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 clause (c) of sub-section (2) of section 29, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST – REG 20.
(5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself.”
WP(C) NO. 29825 OF 2023 5 4.
The proviso is very specific, categorical and unequivocal. If the petitioner has filed the return and paid the interest, penalty and late fee, the impugned order is unsustainable and, therefore, the same is set aside and the matter is remitted back to the 1st respondent to apply Rule 22 and pass a fresh order. If the petitioner has committed any future default after 10th August, 2022, petitioner may be issued fresh notice. But, upto the August, 2022, if the petitioner has filed the return and paid tax, interest and late fee, his registration is to be restored. The 1st respondent is directed to conclude the proceedings within a period of fifteen days. The petitioner is directed to appear before the 1st respondent on 20.02.2024.
with the above directions, the present writ petition is hereby disposed of.
Sd/- DINESH KUMAR SINGH JUDGE Svn
WP(C) NO. 29825 OF 2023 6 APPENDIX OF WP(C) 29825/2023 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 10.08.2022 EXHIBIT P2 TRUE COPY OF THE ORDER DATED 08.01.2023 PASSED BY THE 1ST RESPONDENT EXHIBIT P3 TRUE COPY OF THE NOTIFICATION 03/2023- CENTRAL TAX DATED 31.3.2023 EXHIBIT P4 TRUE COPY OF THE NOTIFICATION 23/2023- CENTRAL TAX DATED 17.7.2023 EXHIBIT P5 TRUE COPY OF THE RETURN FILED BY THE PETITIONER FOR THE PERIOD JULY AND AUGUST 2022 DATED 16.9.2022 EXHIBIT P6 TRUE COPY OF THE E-MAIL RECEIVED BY THE PETITIONER FROM THE HELP DESK DATED 09.08.2023 EXHIBIT P7 TRUE COPY OF THE MEDICAL CERTIFICATE DATED 16.08.2022