Krishanu Borthakur vs. Union Of INDIA And 2 Ors
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The petitioner, Krishanu Borthakur, is registered under the GST Act, 2017, and operates a works contract business. He failed to file his GST returns for six consecutive months due to personal issues. Consequently, on February 19, 2024, the Superintendent of Central Goods and Service Tax, Tinsukia, issued a show cause notice proposing cancellation of his GST registration. The petitioner's registration was cancelled by an order dated March 7, 2024. The petitioner intended to file an appeal under Section 107 of the CGST Act, 2017, read with Rule 108 of CGST Rules, 2017, but realized the appeal period had elapsed, and the appellate authority lacked the power to condone delays beyond one month after the expiry of the three-month appeal window. Therefore, the petitioner approached the High Court directly.
Held
The Court held that the cancellation of the petitioner's GST registration should be interfered with and set aside. The reasoning was that if the petitioner is not within the GST regime, statutory dues that may be required to be deposited by him will not be collected, which is not in the interest of revenue. To ensure the petitioner complies with his statutory obligations of paying taxes under the GST regime, it is necessary for the departmental authorities to reconsider the prayer for revocation of the cancellation. The Court noted that similar orders have been passed by this Court and other Co-ordinate Benches in matters where GST registrations were restored upon payment of all statutory dues. Accordingly, the Court directed Respondent No. 3 to intimate the petitioner the total outstanding statutory dues, if any, up to the date of cancellation. Upon payment of these dues by the petitioner, the respondent authority is directed to pass appropriate orders revoking the cancellation and restoring the petitioner's GST registration. The writ petition was disposed of on these terms.
Key Issues
1. Whether the cancellation of the petitioner's GST registration for non-filing of returns for six months is sustainable, considering the petitioner's submission of returns prior to the default and the potential impact on revenue collection? 2. Whether the Court should direct the restoration of the petitioner's GST registration, similar to orders passed in other writ petitions concerning similar circumstances? Petitioner's arguments: The petitioner argued that due to personal problems, there was a continuous default of six months in filing GST returns. He also highlighted that the time limit for filing an appeal had expired, and the appellate authority could not condone the delay. He relied on various orders passed by Co-ordinate Benches of the High Court where GST registrations were restored. The petitioner contended that restoration of registration is necessary for him to comply with his statutory obligations and deposit taxes. Revenue's arguments: The learned Standing Counsel for GST did not dispute the position that Co-ordinate Benches have passed orders directing the restoration of GST registration upon complete payment of all dues, if any.
Sections Cited
Section 107, Rule 108
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Cause title — parties, addresses and appearances
JUDGMENT 03.01
.2025 Heard Mr. R.S. Mishra, learned counsel for the writ petitioner. Also heard Mr. S. C. Keyal, learned Standing Counsel, GST, for the respondents.
The petitioner is engaged in execution of works contract and is an assessee registered under the provision of GST Act, 2017 and has GST Registration being Registration No. 18AQBPB7776P1Z7. 3. Pursuant to being registered under the GST Act, the petitioner has been regularly submitting his GST returns. However, due to several personal problems his GST returns could not be submitted for a continuous period of 6 (six) months. On 19.02.2024, respondent No. 3 issued a show cause notice on the petitioner to show cause as to why the GST registration should not be cancelled for not filing the returns for a continuous period of 6 months. The reply was directed to be submitted within 7 days from the date of service of notice.
It is submitted by the learned counsel for the petitioner that by order dated 07.03.2024 under reference No. ZA180324003948F, the GST registration of the petitioner was cancelled. The effective date of cancellation was 07.03.2024. The petitioner decided to approach the appellate Authority under Section 107 of the CGST Act, 2017 R/W Rule 108 of CGST Rules, 2017 for invocation of cancellation of the GST Registration. But subsequently petitioner realised that since the order of cancellation of GST was passed on 07.03.2024 and the time limit for filing the appeal has already been elapsed and the appellate Authority having not been vested with the power and juri iction to condone the delay
Page No.# 3/5 beyond one month after the expiry of 3 month, the petitioner having no other alternative has decided to approach this Court directly instead of preferring the appeal. The learned counsel for the petitioner refers to various orders passed by the Co-ordinate Benches too, whereby this Court had passed orders for restoration of the GST registration.
Mr. S.C. Keyal, learned Standing Counsel, GST, however, does not dispute the position that orders have been passed by the Co-ordinate Benches directing the restoration of GST Registration upon complete payment of all dues, if any.
The learned counsels for the parties have been heard. Pleadings on record have also been perused.
The petitioner is engaged in execution of works contract. Under the GST regime, the petitioner was required to pay the necessary dues under the CGST or SGST as the case may be or both. These statutory dues are required to be paid by all entities who are registered under the GST regime. Such payments of statutory due(s) contribute towards the revenue collection by the Union. If the petitioner is not included within the GST regime, then any statutory dues that may be required to be deposited by the petitioner will not be deposited and which will not be in the interest of the revenue. Therefore, in order that the petitioner is required to comply with his statutory obligations of payment of taxes under the GST regime, it would be necessary for the departmental authorities to re-consider the prayer of the petitioner for revocation of his cancellation of GST registration.
It is submitted at the bar that there are several orders passed by this Court as well as by other Co-ordinate Benches in similar matters whereby the matters
Page No.# 4/5 have been disposed of with a direction to the respondent authority to revoke the cancellation of registration upon due payment of all statutory dues payable by the petitioners. In some matters, the assessee had approached the statutory appellate authority for redressal of their grievances which however was rejected by the appellate authority. This Court is therefore of the view that since similar such orders have been passed by this Court as well as other Co-ordinate Benches, it will serve no purpose to keep the present writ petition pending. This present writ petition can also be disposed of in terms of similar orders as had been done by the orders passed in W.P(C) No. 6930/2023, W.P(C) No. 1049/2023, WP(C) No.5181/2023 and WP(C) No.6366/2023. 9. Accordingly, the impugned order dated 07.03.2024 is hereby interfered with and set aside. It is directed that the Respondent No. 3, namely Superintendent of Central Goods & Services Tax, Guwahati will intimate the petitioner the total outstanding statutory dues, if any, standing in the name of the petitioner till the date of cancellation of his GST registration. Upon such intimation, if any such outstanding statutory dues under GST are required to be paid, the same shall be deposited by the petitioner without fail. Upon such payment of statutory dues under the GST by the petitioner, the respondent authority will pass appropriate orders and revoke the cancellation by restoring the GST registration of the petitioner.
Accordingly, the writ petition stand disposed of. No order as to costs JUDGE
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Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.