Ranjan Saha vs. Superintendent, Range-V, CGST And Ce And Ors.
Original PDF →Facts
The petitioner, Ranjan Saha, filed a writ petition challenging the order dated March 17, 2023, which cancelled his GST registration, and the subsequent order dated November 28, 2023, by the Appellate Authority rejecting his appeal. The registration was cancelled on the grounds of non-filing of returns for a continuous period of six months. The petitioner claims his representative appeared before the authorities, explained the situation, and requested permission to file pending returns. Despite this, the registration was cancelled. The petitioner's grievance is that the cancellation of registration, even for non-filing of returns, is detrimental to revenue as it prevents him from conducting business and raising invoices, thereby impacting tax recovery.
Held
The Court held that the cancellation of the petitioner's GST registration was based solely on the ground of non-filing of returns, with no allegations of tax evasion or fraudulent activities. The Court found that suspending or revoking registration in such cases is counterproductive and detrimental to the interests of the revenue, as it prevents the petitioner from conducting business, raising invoices, and consequently impacts the recovery of revenue. The Court was guided by a previous Division Bench order in Subhakar Golder versus Assistant Commissioner of State Tax, where a similar cancellation order was set aside subject to conditions. Therefore, the Court proposed to set aside the order dated March 17, 2023, cancelling the petitioner's registration, and consequently, the Appellate Authority's order dated November 28, 2023. The registration would be restored upon the petitioner filing all pending returns, paying the requisite tax, interest, fine, and penalty within four weeks. Failure to comply would result in the automatic dismissal of the writ petition. The Court directed the respondents to activate the portal within one week to facilitate the petitioner's compliance.
Key Issues
1. Whether the cancellation of GST registration for non-filing of returns, without any allegation of tax evasion or fraudulent activity, is a pragmatic approach considering its impact on revenue collection, turning on the provisions of the CGST/WBGST Act, 2017. Petitioner's arguments: The petitioner contends that he intends to continue his business and, if granted an opportunity, is ready and willing to comply with the provisions of the Act. He argues that suspending or revoking registration is counterproductive to revenue interests because it prevents business operations and invoice generation, ultimately hindering tax recovery. Revenue's arguments: The respondent CGST Authority submits that the petitioner failed to comply with the provisions of the Act, and therefore, his registration was cancelled. They state there is no personal enmity with the petitioner, and the cancellation was a consequence of non-compliance.
Sections Cited
CGST/WBGST Act, 2017
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12th August, 2024 (AK) 92
W.P.A 15941 of 2024
Ranjan Saha Vs. Superintendent, Range-V, Central Goods and Service Tax & Central Excise, Ballygunge Division and others
Mr. Piyal Gupta …for the petitioner.
Mr. Tapan Bhanja …for the CGST Authority.
Mr. Aryak nDutt Mr. J. Mukherjee …for the respondent no.5. 1. The present writ petition has been filed, inter-alia, challenging not only the order dated 17th March, 2023, cancelling the petitioner’s registration under the provisions of WBGST/CGST Act, 2017 (hereinafter referred to as ‘the said Act’) but also the order passed by the Appellate Authority dated 28th November, 2023. 2. It is the petitioner’s case that the petitioner was served in the show cause notice dated 15th January, 2023 for cancellation of registration under the provisions of the said Act on the ground that the petitioner has not filed his returns for a continuous period of six months.
Pursuant to the aforesaid, the petitioner’s representative had duly appeared before the
2 respondents and offered an explanation with the further request to permit the petitioner to file his up to date returns.
The petitioner claims notwithstanding the aforesaid the juri ictional officer by an order dated 17th March, 2023 was, inter-alia, pleased to cancel the petitioner’s registration.
Being aggrieved, the petitioner had preferred an appeal before the Appellate Authority. The Appellate Authority, however, by its order dated 28th November, 2023 was, inter alia, pleased to reject the said appeal.
Assailing the same, the present writ petition has been filed.
Mr. Piyal Gupta, learned Advocate appearing for the petitioner, submits that the petitioner intends to carry on his business and as such if the opportunity is granted, the petitioner who is otherwise ready and willing, shall comply with the provisions of the said Act.
Mr. Bhanja, learned Advocate enters appearance on behalf of the respondents. He submits that it is the petitioner has failed to comply with the provisions of the said Act.
The department has no personal enmity with the petitioner. Since, the petitioner had not complied
3 with the provisions of the said Act, his registration had been cancelled.
Heard 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 evaded tax or had been engaging in dubious process to evade tax. Taking note of the fact that suspension/revocation of registration would be counter productive and work against the interest of the revenue since the petitioner in such 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 revenue, 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.
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 Subhakar Golder versus Assistant Commissioner of State Tax, Serampore Charge (MAT 639 of 2024) on 9th April 2024, where it is in similar circumstances, a
4 similar order of cancellation of registration has been set aside, subject to the condition that the petitioner files returns for the entire period of default, pays requisite amount of tax and interest and fine and penalty, I propose to set aside the order dated 17th March, 2023 cancelling the registration of the petitioner and as a sequel thereto, also the order dated 28th November, 2023 passed by the Appellate Authority.
It is made clear that if the petitioner complies with the directions/conditions noted above, within 4 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 and the orders dated 17th March, 2023 and 28th November, 2023 shall stand set aside. 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.
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.
5
With the above direction and observations, the writ petition is disposed of without any order as to costs.
All parties to act on the basis of server copy of this order duly downloaded from this Hon’ble Court’s official website.
(Raja Basu Chowdhury, J.)
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.