Mukul Borah vs. The State Of Assam And 4 Ors

Facts

The petitioner, Mukul Borah, challenged an order dated April 1, 2022, which cancelled his GST registration. He subsequently filed an appeal against this cancellation order, but it was rejected on December 15, 2022, due to being time-barred. The petitioner contended that the cancellation was based on non-filing of returns, which he had since rectified by filing the pending returns. He argued that further proceedings would cause him hardship and serve no fruitful purpose for the Department. The respondents, represented by the Standing Counsel for Taxes, maintained that the rejection of the appeal on grounds of limitation was in accordance with the law.

Held

The Court held that given the facts and circumstances, particularly that the sole reason for cancellation of GST registration was non-submission of returns for a particular period, and that the petitioner had since filed these returns, the order of cancellation should be revoked. The Court directed the authorities to revoke the cancellation order and reinstate the GST registration, provided the petitioner had indeed filed the returns. This direction was made conditional upon the prior filing of the returns. The Court further clarified that the returns must be accompanied by all statutory dues and/or penalties. The ratio decidendi is that where a defect leading to cancellation is rectified by the assessee, and the appeal is rejected solely on limitation, the High Court in its writ jurisdiction can direct revocation of cancellation if the rectification is established, to avoid undue hardship and ensure substantial justice.

Key Issues

1. Whether the rejection of the petitioner's appeal against the cancellation of GST registration on the ground of limitation was legally sustainable, considering the petitioner had rectified the reason for cancellation by filing the pending returns? The petitioner argued that since the sole reason for cancellation was non-filing of returns, and these returns had now been filed, the cancellation order and the subsequent rejection of the appeal were causing grave prejudice and hardship without serving any departmental purpose. The revenue, on the other hand, argued that the rejection of the appeal on the ground of limitation was in accordance with the prescriptions of law, implying that the delay in filing the appeal was not condonable.