Sri Annapooraneshwari Hydraulics vs. The Superintendent Of Central Tax

Held

The Court held that the cancellation of the petitioner's GST registration was done without application of mind and contrary to settled principles. The respondent's order dated 03.02.2023 was quashed. The Court directed the respondent to revoke the cancellation of the petitioner's GST registration, subject to the petitioner filing all pending returns up to date and discharging all liabilities along with interest within four weeks from the receipt of the certified copy of the order. The Court found that the respondent's order erroneously mentioned a reply and personal hearing which did not occur, indicating a lack of due diligence. The Court acknowledged the petitioner's financial difficulties as a reason for non-filing of returns but emphasized the need for compliance with statutory obligations, including filing returns and paying liabilities with interest, as a condition for revocation.

Facts

The petitioner, Sri Annapoorneshwari Hydraulics, filed a writ petition challenging the cancellation of its GST registration by the Superintendent of Central Tax, Range ANWD-4, on 03.02.2023. The cancellation followed a show cause notice issued on 09.12.2022. The petitioner admits receiving the show cause notice but claims it did not file a reply due to financial difficulties in realizing service provider receipts for the period May 2022 to November 2022. The petitioner also admits not availing the statutory remedy of appeal. The respondent's order cancelling registration incorrectly refers to a reply dated 09.01.2023 and a personal hearing, neither of which occurred. The petitioner seeks quashing of the cancellation order and revocation of the GST registration.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the respondent on 03.02.2023, based on a show cause notice dated 09.12.2022, is vitiated by non-application of mind and procedural impropriety, despite the petitioner failing to file a reply or avail statutory remedies? Petitioner's Arguments: The petitioner contends that the cancellation order is passed without application of mind, as it erroneously refers to a reply and personal hearing that did not take place. The petitioner argues that the court should intervene despite the non-availability of statutory remedies because the cancellation occurred before 31.12.2022, which would have allowed for revocation without appeal until 30.06.2023 and a further extension until 30.08.2023. The petitioner also states it has since been permitted to file returns up to March 2023. Respondent's Arguments: The respondent does not dispute that the petitioner did not file a reply to the show cause notice or avail the statutory remedy.