Gora Chand Paul vs. Superintendent Of Central Tax, Range-I, Tollygunge Division And Ors.
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The petitioner, Gora Chand Paul, filed a writ petition challenging the order dated February 20, 2023, passed by the Superintendent of Central Tax, cancelling his GST registration. The cancellation was based on the petitioner's failure to file returns for a continuous period of six months. The petitioner contended that he intended to comply with the Act but failed to bring this to the respondents' notice. He relied on a previous High Court judgment in Subhankar Golder Versus Assistant Commissioner of State Tax, where similar cancellations were set aside on conditions. The respondents argued that the petitioner did not file a proper reply to the show cause notice, and their action was justified. They also noted that the petitioner had filed an appeal, which was rejected.
Held
The Court held that the order cancelling the petitioner's GST registration was set aside. The reasoning was that the cancellation was solely based on non-filing of returns, and there was no allegation of the petitioner engaging in dubious practices to evade tax. The Court considered that suspending or revoking a registration can be counterproductive to revenue collection, as it prevents the business from operating and raising invoices, thereby impacting tax recovery. Therefore, a pragmatic approach was deemed necessary. The Court followed the directions issued by the Division Bench in the case of Subhankar Golder. The ratio decidendi is that where a GST registration is cancelled for non-filing of returns without any tax evasion, the registration may be restored subject to the taxpayer filing all pending returns and clearing all dues, to ensure continued revenue collection. The operative direction is to restore the petitioner's registration upon compliance within four weeks, failing which the writ petition would stand dismissed. The portal is directed to be activated within one week for compliance.
Key Issues
1. Whether the order cancelling the petitioner's GST registration on the ground of non-filing of returns for six months is sustainable in law, considering the petitioner's stated intention to comply and the principles laid down in similar cases? (Mixed question of law and fact, turning on Section 29(2) of the CGST Act, 2017 and principles of natural justice). Petitioner's argument: The petitioner argued that the cancellation order should be set aside, similar to the case of Subhankar Golder, provided he files all pending returns and pays the requisite tax, interest, fine, and penalty. Revenue's argument: The respondents contended that the cancellation was justified as the petitioner failed to file a proper reply to the show cause notice and did not pursue the correct procedural remedies, with his appeal being rejected. They asserted no irregularity in their actions.
Sections Cited
Section 29(2)
AI-generated summary — verify with the full judgment below
20 jks 10.02.2025 WPA 30373 of 2024 Gora Chand Paul Vs. Superintendent of Central Tax & Ors. Mr. Debanuj Basu Thakur … … for the petitioner Mr. Uday Sankar Bhattacharya Mr. Tapan Bhanja Mr. Bijitesh Mukherjee … … for the CGST Authorities The present writ petition has been filed, inter alia, challenging the order of cancellation of registration of the petitioner dated 20th of February, 2023 passed under the Central/West Bengal Goods and Services Tax Act, 2017 (Hereinafter referred to as the "Said Act"). It is the petitioner's case that on 15th January, 2023, the petitioner was served with a show cause as to why the registration of the petitioner under the said Act shall not be cancelled for the petitioner having failed to file his returns for a continuous period of six months. Mr. Basu Thakur, learned advocate appearing for the petitioner submits that the petitioner was and is all along interested to comply with the provisions of the said Act, unfortunately the aforesaid fact could not be appropriately brought to the notice of respondents. By placing reliance on a judgment of the Hon'ble Division Bench of this Court delivered in the case of Subhankar Golder Versus Assistant Commissioner of State Tax, Serampore Charge (MAT 639 of 2024) on 9th April, 2024, it is submitted that in similar circumstances, similar order of cancellation of registration had been set aside, subject to the condition that the petitioner files returns for the entire period of default, pays requisite amount of tax, interest, fine and penalty. He submits that this Court may be pleased to set aside the order of cancellation and allow the petitioner to file his returns on the same terms. Mr. Uday Shankar Bhattacharya, learned advocate appearing on behalf of the respondents on the other hand submits that in the instant case although a show cause notice was issued, since the petitioner did not file any proper reply, the registration was cancelled. The petitioner did not file any revocation application but preferred an appeal but the same was rejected. According to the respondent authorities, there is no irregularity on the part of the respondent authorities in cancelling the registration. Heard the learned advocates appearing for the respective parties and considered the materials on record. Admittedly, I find that the registration of the petitioner had been cancelled on the ground of non- filing of returns. It is not the case of the respondents that the petitioner had been adopting dubious process to evade tax. Taking note of the fact that the suspension/revocation
of licence
would
be 2
counterproductive and work 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, therefore, 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. I find from the submissions made by the respondents that unless, the petitioner files his returns, the respondents cannot determine the final liability. Having regard to the aforesaid and taking note of the direction issued by the Hon'ble Division Bench of this Court in the case of Subhankar Golder (supra), I propose to set aside the order dated 20th February, 2023 cancelling the registration of the petitioner subject to the condition that the petitioner files his returns for the entire period of default and pays requisite amount of tax, interest, fine and penalty. 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. However, if the petitioner fails to comply with the directions as aforesaid, the benefit of this order will not enure to the 3
petitioner and the writ petition would stand automatically dismissed. For the purpose of compliance of the above directions, the respondents are directed to activate the portal within one week from date, so that the petitioner can file his returns, pays requisite amount of tax, interest, fine and penalty. With the above direction and observations, the writ petition being WPA 30373 of 2024 is disposed of. There shall be no order as to costs. All parties shall act on the basis of the server copy of this order duly downloaded from the official website of this Court. (Rajarshi Bharadwaj, J.) 4
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.