M/S.Solomon Adriel Sunder Raj vs. Superintendent Of Central Tax

Held

The Court, without expressing any opinion on the merits of the case, set aside the order dated December 28, 2020, and remanded the matter back to the file of the respondent. The Court directed the respondent to hear the petitioner and thereafter pass a fresh order in accordance with the law. The Court also clarified that at the time of hearing, the petitioner would be at liberty to submit the returns as per the statute. This decision was based on a series of previous decisions by the same Court, including in M/s. Chenna Krishnama Char5rulu Karampudi v. Additional Commissioner (Appeals-II), where similar matters were remanded for fresh consideration. The ratio decidendi is that in cases where the inability to comply with statutory obligations like filing returns is attributed to exceptional circumstances like a pandemic, the authorities should provide an opportunity for a fresh hearing and consideration before passing a final order, especially when the petitioner expresses willingness to regularize their filings.

Facts

The petitioner, M/s. Solomon Adriel Sunder, challenged an order dated December 28, 2020, passed by the Superintendent of Central Tax, Hyderabad, cancelling its GST registration. The cancellation was based on the petitioner's failure to file GST returns for six months. A show cause notice was issued on December 16, 2020, and the petitioner submitted a reply on December 25, 2020. The respondent did not accept the reply and proceeded with the cancellation. The petitioner contended that the COVID-19 pandemic and the resultant lockdown adversely affected its business activities, preventing timely filing of returns. The petitioner sought to set aside the cancellation order, arguing it was arbitrary and illegal.

Key Issues

1. Whether the suo motu order for cancellation of GST registration, passed by the respondent on December 28, 2020, is arbitrary, illegal, and contrary to law, considering the impact of the COVID-19 pandemic on the petitioner's business activities and its inability to file GST returns regularly? (Question of mixed law and fact, turning on Section 29 of the CGST Act). Petitioner's arguments: The petitioner argued that the COVID-19 pandemic and the subsequent lockdown adversely impacted its business operations, leading to the non-filing of GST returns. They relied on the principle that such unforeseen circumstances should be considered when evaluating compliance. The petitioner sought to set aside the cancellation order as illegal and arbitrary. Respondent's arguments: The judgment does not record any specific arguments made by the respondent. However, the respondent passed the order cancelling the registration, implying a reliance on the grounds stated in the show cause notice.