M/S Miraj Builders And Anr. vs. Union Of INDIA And Ors.

Held

The Court held that the cancellation of registration was based on the ground of non-filing of returns, and it was not the respondents' case that the petitioners were evading tax. The Court observed that suspension/revocation of registration would be counterproductive and detrimental to the revenue as it would prevent the petitioner from carrying on business, raising invoices, and ultimately impact tax recovery. Therefore, a pragmatic view was necessary. Citing the Division Bench judgment in Subhakar Golder, the Court decided to set aside the order dated May 26, 2023, cancelling the registration of petitioner no. 2. This was made conditional upon petitioner no. 2 filing all pending returns, paying the requisite tax, interest, fine, and penalty. Additionally, the petitioners were directed to deposit Rs. 12,500/- towards costs to the respondents and Rs. 12,500/- to the Calcutta High Court Legal Services Committee. The order of the Appellate Authority dated August 23, 2024, was also set aside. The Court directed the respondents to activate the portal within one week for the petitioner to file returns and make payments. If these conditions are met within four weeks, the registration will be restored; otherwise, the writ petition will stand dismissed.

Facts

The petitioners, M/s Miraj Builders & Ors., filed a writ petition challenging the order cancelling the GST registration of petitioner no. 2 under the WBGST Act, 2017. Petitioner no. 2 received a show cause notice on February 3, 2023, for failing to furnish returns for six continuous months. The petitioners contended they intended to comply but failed to file a reply to the show cause notice. They sought to set aside the cancellation order, allowing them to file pending returns. The CGST authorities argued that the cancellation was justified due to non-compliance and the dismissal of a belated appeal by the Appellate Authority.

Key Issues

1. Whether the cancellation of GST registration for non-filing of returns, despite the petitioner's willingness to comply and pay dues, is justifiable under the WBGST Act, 2017? 2. Whether the Court can set aside the order of cancellation and the appellate order, subject to conditions, in light of the Division Bench's decision in Subhakar Golder v. Assistant Commissioner of State Tax? Petitioner's Arguments: The petitioners argued that they were always willing to comply with the Act and file returns, but this was not brought to the respondents' notice. They relied on the Division Bench judgment in Subhakar Golder, where similar cancellations were set aside on the condition of filing returns, paying dues, and penalties. They prayed for the cancellation order to be set aside and for permission to file returns. Revenue's Arguments: The CGST authorities contended that the petitioner no. 2 failed to comply with statutory provisions, leading to the cancellation. They asserted that an opportunity to show cause was given, and since no reply was filed, the registration was cancelled. They also noted that the belated appeal filed by the petitioners was dismissed by the Appellate Authority, indicating no irregularity in the authorities' actions.