Mohammed Ehsan Mallick vs. The Superintendent, CGST An Cx, Asansol Range-Vi, Asansol-I Division And Ors.

WPA/22162/2024HC CalcuttaGSTCNR WBCHCA043381202403 July 2025Bench: HON'BLE JUSTICE RAJA BASU CHOWDHURY6 pages

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Facts

The petitioner, Mohammed Ehsan Mallick, filed a writ petition challenging an appellate order dated August 5, 2024, which dismissed his appeal on grounds of limitation. The petitioner's GST registration was cancelled on February 3, 2023, primarily for non-filing of returns. The petitioner contended that due to health reasons and other unavoidable circumstances, he could not file returns or respond to the show-cause notice. He later filed an appeal, which was beyond the prescribed limitation period. The petitioner expressed his intention to comply with statutory provisions and pay any outstanding tax, interest, penalty, and fine. The respondents argued that the cancellation order and the dismissal of the appeal were justified due to the petitioner's non-compliance and the appeal being time-barred.

Held

The Court held that while the respondents were not irregular in cancelling the registration and dismissing the appeal on grounds of limitation, the petitioner's current willingness to comply with the Act could not be ignored. Citing a Division Bench order in Subhankar Golder v. Assitant Commissioner of State Tax, Serampore Charge & Ors., the Court proposed to set aside the order cancelling the petitioner's registration. This was made conditional upon the petitioner filing all defaulted returns and paying the requisite tax, interest, fine, and penalty within four weeks of receiving the order. The Court directed the respondents to activate the portal within one week to facilitate this compliance. If the petitioner complied, his registration would be restored; otherwise, the writ petition would stand dismissed. The order cancelling registration and the appellate order were set aside.

Key Issues

1. Whether the Appellate Authority erred in dismissing the petitioner's appeal solely on the ground of limitation, thereby precluding consideration of the merits of the case and the petitioner's willingness to comply with GST provisions, contrary to the principles of natural justice and the interest of revenue? (Section 107 of the WBGST/CGST Act, 2017) Petitioner's Contention: The petitioner argued that despite the belated filing of the appeal, the Appellate Authority should have considered his genuine intention to comply with the law and pay all dues, especially since the appellate tribunal was yet to be constituted. He relied on the principle that the cancellation of registration could be counterproductive to revenue collection. He sought setting aside of the appellate order and the cancellation order, subject to his undertaking to comply with the Act. Revenue's Contention: The respondents argued that the petitioner failed to comply with the provisions of the Act, leading to a valid cancellation order. They contended that the appeal was hopelessly barred by limitation and the Appellate Authority rightly rejected it. While not opposing the petitioner's intent to comply, they stated that the exact liability could not be determined at that stage but did not intend to obstruct compliance, subject to payment of all dues.

Sections Cited

Section 107, Section 39(1)

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Cause title — parties, addresses and appearances

03.07.2025 (KAUSHIK) 04 W.P.A 22162 of 2024 Mohammed Ehsan Mallick Vs. The Superintendent, CGST & CX, Asansol Range – VI, Asansol – I Division and others Mr. Dhiraj Lakhotia Ms. Khushi Kundu Mr. Wasim Dafader …for the petitioner. Mr. Kaushik Dey Mr. Kaustav Maity …for the respondent nos. 1 & 2. Mr. Suman Chattopadhyay Ms. Ranjana Chatterjee …for the Union of India. 1. The instant writ petition has been filed, inter alia, challenging an appellate order dated 5th August, 2024 passed under Section 107 of the WBGST/CGST Act, 2017 (hereinafter referred to as ‘the said Act’). 2. Ms. Kundu, learned Advocate appearing on behalf of the petitioner, by drawing attention of this Court to the order of cancellation of registration dated 3rd February, 2023 would submit that the petitioner’s registration under the said Act has been cancelled only on the ground of non-filing of returns. 3. He would submit that although the petitioner had all good intention to comply with the statutory provision as regards furnishing of returns under Section 39(1) of the said Act, however, due to unavoidable circumstances including health grounds, the returns could not be filed. For identical reasons the petitioner could not respond to the show-cause. Subsequently, after passing of the aforesaid order of cancellation the petitioner had applied before the Appellate Authority by filing an appeal. 4. Admittedly such appeal was filed belatedly beyond the prescribed period of limitation. However, despite the fact that the petitioner had all good intentions and is interested to make payment of tax, interest, penalty and fine as may be found due since, the appeal was dismissed on the ground of limitation such aspect could not be considered. He submits that the appellate tribunal is yet to be constituted and as such the instant writ petition has been filed. As such this Hon’ble Court in the given facts may be pleased to set aside the order passed by the Appellate Authority, inter alia, including the order of cancellation of registration on the undertaking given by the petitioner that the petitioner shall comply with the provisions of the said Act and shall pay tax, interest, fine and penalty as may be found due. 2 5. Mr. Dey, learned Advocate appearing on behalf of the respondents, would submit that since the petitioner did not comply with the provisions of the said Act and did not file the returns in time, after giving an opportunity to the petitioner to show cause, the order of cancellation had been passed. There is no

irregularity in such an order.

The appeal filed by the petitioner was hopelessly barred by limitation and as such the Appellate Authority has rightly rejected the appeal. As regards the claim made by the petitioner that the petitioner is interested to comply with the provisions of the said Act by making payment of tax, interest, penalty and fine as may be found due, he submits that it is not possible at this stage for the respondents to identify the exact liability. However, if the petitioner is interested to comply with the provisions of the said Act, respondents do not intend to stand in the way subject to the petitioner making payment of requisite tax, interest, penalty, fine and late fee as may be found due.

Heard the learned Advocates appearing on behalf of the respective parties and considered the materials on record. Admittedly, I find that the petitioner’s registration under the said Act had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had 3

been adapting dubious process to evade tax. Taking note of the fact that the suspension/revocation of license would be counterproductive and works against the interest of the revenue since, the petitioner in such a case would not be able to carry on his business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax, I am of the view that the respondents should take a pragmatic view in the matter and permit the petitioner to carry on his business.

Although it has been argued by Mr. Sanyal that there is no irregularity on the part of the respondents in cancelling the registration and dismissing the appeal, however, the fact that the petitioner is now interested to comply with the provisions of the said Act, in my view, cannot be ignored.

Having regard to the direction issued by the Hon’ble Division Bench of this Court in the case of Subhankar Golder v. Assitant Commissioner of State Tax, Serampore Charge & Ors. (MAT 639 of 2024) on 9th April, 2024, I propose to set aside the order dated 3rd February, 2023, cancelling the registration of the petitioner under the said Act, subject to the condition that the petitioner files his 4

returns for the entire period of default and pays requisite amount of tax, interest, fine and penalty, if not already paid.

10.

It is made clear that if the petitioner complies with the directions/conditions noted above, within four weeks from the date of receipt of the server copy of this order, the petitioner’s registration under the said Act shall be restored by the Juri ictional Officer/respondent no.

However, if the petitioner fails to comply with the directions as aforesaid, the benefit of this order will not enure to the petitioner and the writ petition would stand automatically dismissed.

11.

For the purpose of compliance of the above directions, the respondents are directed to activate the portal within one week from the date of communication of this order, so that the petitioner can file his returns, pays requisite amount of tax, interest, fine and penalty if not already paid.

12.

As a sequel to the above, the order dated 3rd February, 2023, cancelling the petitioner’s registration under the said Act and the order dated 5th August, 2024 passed by the Appellate Authority stand set aside. 5

13.

Since, no affidavit-in-opposition has been called for, the allegation made in the writ petition are deemed not to have been admitted by the respondents.

14.

With the above direction and observations, the writ petition is disposed of without any order as to costs.

15.

Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of the necessary formalities. (Raja Basu Chowdhury, J.) 6

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