M/S R P Buildcon Private Limited And Anr vs. The Superintendent, CGST And Cx, Range Iii, Barrackpore Division And Ors

Held

The Court held that cancelling GST registration for non-furnishing of returns, without any allegation of tax evasion, is counterproductive and detrimental to the interest of revenue. This is because a cancelled registration prevents the petitioner from raising invoices, thereby impacting the recovery of tax. The Court found that the petitioners were not adopting dubious means to evade tax. Therefore, the Court proposed to set aside the order of cancellation dated 24th July, 2024, subject to the condition that the petitioners file all pending returns and pay the applicable tax, interest, penalty, and fine. The Court directed the jurisdictional officer to restore the petitioner's registration if these conditions are met within four weeks. The respondents were also directed to activate the petitioners' portal and login credentials within one week to facilitate compliance. If the petitioners fail to comply, the writ petition would stand automatically dismissed.

Facts

The petitioners, M/s R P Buildcon Private Limited & anr., filed a writ petition challenging the order of cancellation of their GST registration dated 24th July, 2024, passed by the Superintendent, CGST & CX, Range-III, Barrackpore. The cancellation was based on the ground of non-furnishing of returns under Section 39 of the CGST Act, 2017. The petitioners expressed their willingness to continue the business and comply with the provisions of the Act, including payment of outstanding tax, interest, penalty, and fine. The respondents are the Superintendent, CGST & CX, Barrackpore, and others, including the Union of India.

Key Issues

1. Whether the cancellation of GST registration on the ground of non-furnishing of returns, without alleging tax evasion, is a pragmatic approach that serves the interest of revenue? (Mixed question of law and fact, concerning Section 39 of the CGST Act, 2017). Petitioner's contention: The petitioners argued that they are willing to comply with the provisions of the GST Act and pay all outstanding dues. They emphasized their desire to continue their business. Revenue's contention: The judgment does not record any specific arguments made by the revenue or state. However, the order implies that the revenue's initial action was based on non-compliance with return filing requirements.