Ashirbad Real Estate And Transport PVT.LTD vs. Assistant Commissioner,Central Goods And Service Tax And Ors

Held

The Court decided to grant the petitioner two equal installments to pay the outstanding statutory interest for the restoration of its GST registration. The first installment is to be paid within seven days from the date of the order. Upon payment of the first installment, the respondent authority is directed to restore the petitioner's registration, subject to compliance with other formalities. The second installment is to be paid within seven days from the date of registration restoration. The Court also stated that if the department believes there is a mistake in the petitioner's calculation of statutory interest and a further amount is due, they must intimate this to the petitioner after the first installment is paid and registration is restored. The ratio decidendi is that where a taxpayer has paid substantial dues and faces financial hardship, and has taken steps to rectify non-compliance, the tax authorities should consider granting reasonable relief for the payment of remaining statutory dues to facilitate registration restoration. The Court expressly left undecided any potential dispute regarding the exact calculation of statutory interest, to be addressed by the department after the initial restoration.

Facts

The petitioner, Ashirbad Real Estate & Transport Private Limited, challenged an order cancelling its GST registration. The cancellation was due to non-filing of returns for the period May 2018 to June 2019. The petitioner has since filed the returns and paid the due taxes and late fees, with only statutory interest remaining outstanding. The petitioner cited financial hardship. The impugned order was passed by the Assistant Commissioner, Central Goods & Service Tax, Asansol-I Division.

Key Issues

1. Whether the cancellation of GST registration for non-filing of returns, when the petitioner has subsequently filed returns and paid taxes and late fees, is justified, considering the petitioner's financial hardship and the substantial amount already paid. Petitioner's arguments: The petitioner contended that despite the delay in filing returns and payment, they have now rectified the situation by filing returns and paying a significant amount of tax and late fees (over two crores). They argued that due to financial hardship, they should be granted relief in the form of installments for the remaining statutory interest to get their registration restored. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or the State. It only notes that learned Advocates for the State were present and heard.