Sri Ubaid vs. The Assistant Commissioner Of State Tax

Held

The Court allowed the writ petition. It quashed the impugned order of cancellation of registration dated August 22, 2023 (Annexure-A1) and the order rejecting the application for revocation of cancellation dated September 12, 2023 (Annexure-D). The Court reasoned that in light of the petitioner's specific assertion of bonafide reasons, unavoidable circumstances, and sufficient cause for not replying to the show-cause notice, a justice-oriented approach warranted setting aside the impugned orders and remitting the matter back to the respondent to provide one more opportunity to the petitioner. The respondent was directed to reinstate the petitioner's GST registration within four weeks, subject to the petitioner filing GST returns and paying up-to-date tax, interest, and penalty within the same period. The Court explicitly stated that this order was made in peculiar/special facts and circumstances and should not be treated as a precedent.

Facts

The petitioner, Sri Ubaid, obtained GST registration on November 16, 2022. The Assistant Commissioner of State Tax issued a show-cause notice dated July 5, 2023, which the petitioner claims went unnoticed due to bonafide reasons and unavoidable circumstances. Consequently, the respondent passed an order on August 22, 2023, cancelling the petitioner's GST registration under Section 29 of the Central Goods and Services Act, 2017. The petitioner then filed an application for revocation of this cancellation on August 24, 2023. However, the respondent rejected this application by an order dated September 12, 2023. Aggrieved by these orders, the petitioner filed a writ petition before the High Court of Karnataka.

Key Issues

1. Whether the order of cancellation of GST registration dated August 22, 2023, passed by the respondent under Section 29 of the Central Goods and Services Act, 2017, is liable to be quashed? 2. Whether the order rejecting the application for revocation of cancellation dated September 12, 2023, passed by the respondent is liable to be quashed? The petitioner argued that his failure to reply to the show-cause notice was due to bonafide reasons, unavoidable circumstances, and sufficient cause. He contended that the respondent rejected the revocation application without proper consideration. The petitioner sought to quash both the cancellation order and the rejection order, and to have his GST registration reinstated, allowing him to file pending returns and claim Input Tax Credit (ITC). The respondent, represented by the HCGP, did not record any specific arguments in the judgment.