Sri Lakshmi Home Appliances vs. Union Of INDIA
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The petitioner, Sri Lakshmi Home Appliances, a proprietorship firm, had its Goods and Services Tax (GST) registration cancelled by the Superintendent of Central Tax (Respondent No. 5) on 12.11.2018. The cancellation was based on the ground that the petitioner had not filed GST returns for a continuous period of six months. The petitioner had responded to the show cause notice, but their reply was deemed unsatisfactory. An appeal filed by the petitioner before the Additional Commissioner of Central Tax and GST (Appeals-I) (Respondent No. 3) was rejected on 30.01.2023, affirming the cancellation order. The petitioner then filed a writ petition before the High Court challenging these orders.
Held
The High Court, following its previous decision in M/s. Chenna Krishnama Charyulu Karampudi, set aside the order of cancellation of GST registration dated 12.11.2018 passed by the Superintendent of Central Tax (Respondent No. 5) and the order-in-appeal dated 30.01.2023 passed by the Additional Commissioner (Respondent No. 3). The Court held that in similar circumstances, where a GST Tribunal has not yet been constituted, and to avoid leaving the petitioner without a remedy, it would be just and proper to remand the matter back to the primary authority. The reasoning was that the appellate authority's strict adherence to limitation periods, especially when the GST Tribunal is not functional, could adversely affect the petitioner. Therefore, the entire matter was remanded back to Respondent No. 5 to reconsider the case of the petitioner after giving a reasonable opportunity of hearing and to pass an appropriate order in accordance with law. The petitioner was also directed to submit all returns as per the statute when the matter is heard on remand. The Court explicitly stated that it was not expressing any opinion on the merits of the case.
Key Issues
1. Whether the order of cancellation of GST registration by the Superintendent of Central Tax and the subsequent order of the Additional Commissioner rejecting the appeal are illegal, arbitrary, and violative of the principles of natural justice and constitutional provisions (Articles 14, 19(1)(g), and 21)? Petitioner's arguments: The petitioner contended that the orders were illegal and arbitrary, violating principles of natural justice and constitutional rights. They relied on a previous judgment of this Court in M/s. Chenna Krishnama Charyulu Karampudi v. Additional Commissioner (Appeals-1), which was followed in subsequent decisions, where matters were remanded back to the primary authority for reconsideration after providing an opportunity of hearing. Revenue's arguments: The judgment does not explicitly record arguments made by the respondents. However, the fact that the appeal was rejected by the appellate authority and the cancellation order was upheld implies that the revenue likely argued for the validity of the cancellation order and the appellate order.
Sections Cited
Section 107, Section 109, Section 112
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Cause title — parties, addresses and appearances
The Court made the lollowing: ORDER
AND THE HON'B SRI IUSTICE N.TUKA RAI\{I I v.P. o.3090 of2023 ORDER: par rne Ho n'b/e rlt ChieJ Ju.;tiu Ltjial BLayrn) Fleard Mr. J.Narendar, leamed counsel for the petitioner; Mr. B.Mut'herjee, leamed counsel for respondent No'1; and Iv[s. Sapna Reddy, leamed counsel for respondents No2 to 5'
This petition has been filed under Anicle 226 of the C-onstitution of India assailing legality and validity of the order dated 12.11.2018 passed by respondent No.5 cancelling the Goods and Sewice Tax (GST) registration of the petitioner as well as the order-in-appeal dated 30.01.2023 passed by respondent NoJ rejecting the appeal filed by the petitioner and affirming the order of respondent No.5. 3. Petitioner before us is a proprietary firm carryng on the business of sale of home appliances. Following introduction of GST, it had obtained GST registration bearing No.36ASCFJ1447Q2Z . On the ground that petitioner had not filed GST retum for a continuous period of six months, show fTEE HO}I' B I-E'T H E C I{ I EF JUUTE,E]]JJ4L IIIT]YA N I
-- ) cause notice dated 15.10.20i8 was issued to the petitioner by respondent lro.5 to show cause as to why its Gil' re,gistration should not b, cancelled. In response to the abo.ze show cause notice, petiticner submitted reply dated 26.10.201ll. However, reply submitteC b1, d1s peririoner was found to be rrot sarisfacrory and accordi rgly, respondent No.5 passed thr: order dated 12.ll.2( 18 cancelling GST registration oi the p,:ritic,ner.
Aggrievtd by the same, petirioner preferred appeel before respondent llo.3 Flowever, by the order :nder appeal dated 10.0i.20 13, respondeirt No.3 noted that GST registration of the petitionervas cancelled s/./0 nltu byrespondent \o.
Appeal filed was for-rnc to be devoid of merit and was accordinglyr:ejected.
Issue rai,ed in this writ petition is no longer re: in,tegra. In M,/s. Chenna Krishnama Charyulu Karampudi r," Additional Comrnissione (Appeals-1)1, which has been f,rllowed in subsequent decLsions, this C-ourt had remanded the nratter back to the file of tlrc I rimary authoriry to recorsider and pa: s app,ropriare \ zozzlllrvn az
ordcr afte r giving opportunity of hearing to the petitioner. It was held :rs tollows: l. Petitioner is a proprietorship fim engaged in the business of carrying out worls contract services. It is registered with the Goods and Services Ta.x (GST) authorities in the State of Telangana. By the order dated 22.01.2019, respondent No.2 cancelled registration of the petitioner under GST. fuains tht order of cancellation, petitioner preferred appeal before respondent No.l assailing the legaliry and validity o[ the order dated 22.01.2019. By the order darcd 19.04.2022, respondent No.l as the appellate authority has held that the appeal was filed belond the period of extended limitation. Accordingly, the appeal was dtmissed.
FIence, the writ petition.
On a query by the C-oun as to why petitioner has not approached the Goods and Services Tax Tribunal (GST Tribunal) under Section ll2 of the Gntral Goods and Services Tax Act, 20V Snef\, 'CGST Act' hereinafter), learned couruel for the petitioner submits that till date no GST Tribunal has been constituted.
We have perused the order dated 19.04.2022. This is an order passed by the fint appellate authority under Section 107(1) of the CGST Act. As per.subsection (1) of Section 107 of the CGST Act, Iimitation for filing appeal is three montls from the date of communication of the order appealed againsr Under sub-section (4) of Section 107 of the CGST Act, the appellate authoriry may ..1.. I \
.l -E- irllorv the ;rppeal to be prescnted within a funhel peric,d o[ on : mondr, provicled su] ficient cause is shorn l>y thc appell rnt.
T rough dre lower appellate authoriry may tn: riglrt in ho ding that rvhile it may allow filing of an appeal belon I the limitation of *rree months for a lirnhur perioc of one mont[ therefore, by extersion of lirritation beyon I the extendcd period of one month delay repnd the cx.ended period of one month cannor be cordone<l, we are o[ the view that such a stand taken by respondert No.1 r rr:rv advenely affcct the petitioner. This is nr,rre s,r becau: respondent No.2 ha.d sao nolu catcell,d th.- GST r rgistration of thc petitioner on the ground r,l non- liling rf n'tums and :u GST Tribunal has no - been constit rtcd under Scction 109 of the CGSI' Act, petitior rer would be left without any remedy. 8. \fl1, funher find that the issue penai rs rc) cancell ttion of GST registration of the petitioner. In the facts a rd circumsances of the case, it would be just anc proper if the endre matter is remanded ba:k to respon lent No.2 ro reconsider the case of tJre pet tioner and th,'reafter to pass appropriate order in accortlance with lar r. 9 . In the light of the above and without expressing any opi rion on merit, we remand the matter back -"o the file of respondent No.2 to consider the grievance express, d by the petitioner against cancellation o{ GST registrar ion and thereafter pass an appropriate onler in accorda rce with law. Needless to say, wher the /
(, rcspon(lent No.2 hean thc matter on remand, petitioner shall subnlit all the rtturns as per the smmte." Following the above, we set aside the order of respondent No.5 dated 12.11.2018 and order of respondent No.3 dated 10.01.2021 and remand the matter back to the file of respondent No.5 to consider the matter afresh and after giving a reasonable opportunity of hearing to the petitioner, to pass appropriate order in accordance with law. Needless to say when respondent No.5 hears the matter on 7 r-ernancl, it would be open to the petitioner to subn-rit the retums as Per the srarute. Writ Petition is accordinglydisposed of. No costs. fu a sequel, miscellaneous petitions, pending if any, stand closed / //// C.PRAVEEN KUMAR ASSISTANT REGIETRAR 'tL SECTION OFFICER To 1 2 3 . The Secretary, Union of lndia, Ministry of Finance, lncome Tax Department, New Delhi. . The Principal Commissioner of Central Tax, Hyderabad GST Co m m issio ne rate, HYderabad. . ihu Additional Comririssioner, of Central Tax and GST (Appcdl-l), Customs Central Tax Commissioner Office, 7th Floor, GST Bhavan, L'B Stadium Road, Hyderabad. ft,Jlbinl Commissioner, GST Bhavan, L.B. Stadium Road, Hyderabad' . ffre Suoerintendent of Central Tax, Nalgonda Range, Nalgonda GST Divisrori, Ranga Reddy GST Commissionerate-,-Hyderabad' . one cC to SRI NARENDAR JALLI, Advocate to?ucl . One CC to SRI B.MUKHERJEE, Advocate IOPUC] . One CC to M/s. SAPNA REDDY, Advocate [OPUC] . Two CD Copies 4 t) 7 8I PSK\\tr
HIGH COURT HC,J & NTR,J DATED:06102t2023 ORDER WP.No.3090 <,f 2023 DISPOSING C F THE WRIT PETITION WITHOUT COSTS. gE SraI; { t I ii 1 0 tE0 7.,121 {. : 4,o
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.