Mahantha Reddy vs. The Assistant Commissioner Of - Karnataka High Court, 25 April 2024

Cause title — parties, addresses and appearances

- 1 - NC: 2024:KHC:16882 WP No. 1869 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF APRIL, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 1869 OF 2024 (T-RES) BETWEEN: MAHANTHA REDDY, A PROPRIETORSHIP CONCERN, REPRESENTED BY ITS PROPRIETOR MAHANTHA REDDY, SON OF SHRI NARAYANA REDDY, AGED ABOUT 38 YEARS, HAVING OFFICE AT 18/1, OFF ITPL RAOD, DODDANEKUNDI, BENGALURU URBAN, KARNATAKA – 560 048. …PETITIONER (BY SRI. PRADYUMNA HEJIB., ADVOCATE) AND: THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, NO. 58, 1ST FLOOR, HAL 2ND STAGE, DEFENCE COLONY, 100 FEET ROAD, INDIRA NAGAR, BENGALURU – 560 038. …RESPONDENT THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER BEARING REFERENCE NO.ZA290221154083W DATED 12.02.2021 ANNEXURE - A PASSED BY THE RESPONDENT AND TO DIRECT HIM TO REVOKE THE CANCELLATION OF THE GST REGISTRATION OF THE PETITIONER. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:16882 WP No. 1869 of 2024

ORDER

In this petition, the petitioner seeks to quash the impugned order dated 12.02.2021 at Annexure-A, cancelling the GST registration of the petitioner and for other relief.

Heard the learned counsel for the petitioner and learned counsel for the respondent. Perused the material on record.

In additional to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submitted that the petitioner was unable to file returns in GSTR-3B for continuous period of six months on account of COVID-19 Pandamic as well as financial hardship caused to the petitioner and who also could not pay the requisite tax at that point of time. It is submitted that the petitioner is in the business of renting out immovable properties and tenants did not pay rental income to the petitioner, who was not in a position to either prefer an appeal or seek revocation of the GST cancellation and as such, the petitioner without any option, has approached this Court by way of present petition. NC: 2024:KHC:16882

It is submitted that the inability and omission on the part of the petitioner to file GST returns for continuous period of six months and also pay the tax due to bonafide reasons, unavoidable circumstances and sufficient cause. It is also submitted that the petitioner would remit the entire up to date taxes along with interest within a period of one week from today and consequently the impugned order may be set aside and cancellation of GST registration of the petitioner may be revoked and same be restored in favour of the petitioner.

Per contra, learned AGA would support the order passed by the respondent and submits that there is no merit in the petition and same is liable to be dismissed.

A perusal of the material on record including impugned order would indicate that inability and omission on the part of the petitioner to file GST returns in GSTR-3B was due to bonafide reasons, unavoidable circumstances and sufficient cause, in particular the loss of income by the petitioner due to prevailing COVID-19 Pandamic. It is also relevant to state that the period prescribed for seeking revocation of cancellation by the petitioner and filing the appeal against the cancellation having expired, in the NC: 2024:KHC:16882 special/peculiar facts and circumstances of the instant case and without making this order a precedent or having any precedential value for any purpose whatsoever, I deem it just and appropriate to set aside the impugned order and restore the GST registration of the petitioner by imposing certain terms and conditions on the petitioner.

In the result, I pass the following ORDER (i) Petition is hereby allowed; (ii) Impugned Order dated 12.02.2021 at Annexure-A passed by the respondent is hereby set-aside; (iii) Cancellation of the GST registration of the petitioner is restored subject to the petitioner paying entire up to date tax including arrears along with interest within a period of one week from the date of receipt of a copy of this order. JUDGE SMJ List No.: 1 Sl No.: 20