Integrated Projects vs. Assistant Commissioner Of Commercial Taxes

WP/2789/2024HC KarnatakaGSTCNR KAHC01004732202427 March 2024Bench: S.R.KRISHNA KUMAR3 pages

For Petitioner: SMT. VANAJA M R, ADVOCATEFor Respondent: SRI HARISHA A S, AGA

AI SummaryAllowed

Facts

The petitioner, Integrated Projects, filed a writ petition challenging the cancellation of its GST registration by the Assistant Commissioner of Commercial Taxes. The cancellation order, dated January 12, 2023, was issued after the respondent had issued a show cause notice on December 22, 2022, citing non-filing of returns within the prescribed period. The petitioner contended that it had already filed its returns and paid taxes on August 25, 2022, and that the cancellation order was cryptic, unreasonable, and violative of natural justice. The respondent argued that the writ petition lacked merit.

Held

The Court held that the impugned order dated January 12, 2023, cancelling the petitioner's GST registration, was unsustainable. While acknowledging that the petitioner had initially failed to file returns and pay taxes within the prescribed time, the Court noted that the petitioner had subsequently filed the returns and paid taxes on August 25, 2022. Furthermore, the Court found the impugned order to be cryptic, laconic, unreasonable, and non-speaking, indicating a lack of application of mind regarding the reasons for cancellation. Consequently, the Court set aside the impugned order. The Court directed the petitioner to pay any pending dues within two months from the date of the order. The ratio decidendi is that a cancellation order for GST registration must be a speaking order, demonstrating application of mind, and should consider subsequent compliance by the assessee, especially when the order is otherwise found to be non-speaking and violative of natural justice.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the respondent, vide order dated 12.01.2023, is arbitrary, unreasonable, non-speaking, and violative of the principles of natural justice, particularly in light of the petitioner's subsequent filing of returns and payment of taxes on 25.08.2022? The petitioner argued that the impugned order cancelling its GST registration was unsustainable because it was passed without proper application of mind, was cryptic and laconic, and failed to address the fact that the petitioner had subsequently filed its returns and paid taxes. The petitioner asserted that the order violated the principles of natural justice. The respondent, represented by the learned AGA, contended that the writ petition had no merit and ought to be dismissed.

Sections Cited

Not specified

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

- 1 - NC: 2024:KHC:12611 WP No. 2789 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF MARCH, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No. 2789 OF 2024 (T-RES) BETWEEN: INTEGRATED PROJECTS 3-65, TENKABETTU, NEAR KOLALAGIRI POST BRAHMAVAR, UPURU VILLAGE UDUPI, KARNATAKA – 576 105. REP. BY ITS PARTNER PARVEZ MAOHAMMAD SHAFIQUE AZAMI. …PETITIONER (BY SMT. VANAJA M R, ADVOCATE) AND: ASSISTANT COMMISSIONER OF COMMERCIAL TAXES LGSTO 280 - DGSTO SWAMI VIVEKANANDA 4TH CROSS, AJJARAKADU UDUPI – 576 001. …RESPONDENT (BY SRI HARISHA A S, AGA) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE CANCELLATION OF THE REGISTRATION IN REFERENCE ORDER PASSED BY THE RESPONDENT DATED: 12.01.2023 ANNEXURES-A AND ETC. THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:12611 WP No. 2789 of 2024

ORDER

In this petition petitioner is aggrieved by the impugned order at Annexure A dated 12.01.2023 whereby the GST registration of the petitioner was cancelled by the respondent.

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

A perusal of the material on record will indicate that since the petitioner did not file its returns within the prescribed period, the respondent issued a show cause notice dated 22.12.2022 which was followed by the impugned order dated 12.01.2023 cancelling the GST registration of the petitioner.

It is the grievance of the petitioner that apart from the fact that petitioner had already filed returns and paid taxes as long back as on 25.08.2022, the impugned order being cryptic, laconic, unreasonable, non-speaking and violative of principles of natural justice, the same deserves to be set aside and the cancellation of GST registration of the petitioner deserves to be revoked.

Per contra, learned AGA for the respondent submits that there is no merit in the writ petition and the same is liable to be dismissed. NC: 2024:KHC:12611 WP No. 2789 of 2024

A perusal of the material on record will indicate that though the petitioner had initially not submitted its returns and not paid taxes within the prescribed time, petitioner had subsequently filed the returns and paid taxes on 25.08.2022. In addition thereto, a perusal of the impugned order will indicate that the same is cryptic, laconic, unreasonable and non-speaking order without any application of mind and as to why the GST registration of the petitioner was being cancelled. Under these circumstances, I am of the view that the impugned order passed by the respondent deserves to be set aside.

In the result, the following; O R D E R i. Petition is hereby allowed. ii. The impugned order at dated 12.01.2023 is hereby set aside. iii. Petitioner is directed to pay pending dues, if any, within a period of 2 months from today. JUDGE

LRS

Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.