M/S Galaxy Heights (Partnerhsip Firm) vs. The Union Of INDIA

Held

The Court held that once the petitioner had filed the pending returns, paid the taxes, and deposited the late fees, the competent authority should reconsider the request for revocation of the GST registration cancellation. The Court found that a permanent cancellation of registration could inflict 'civil death' on the petitioner's livelihood. Given that the petitioner filed returns within 15 days of cancellation, paid taxes, and subsequently deposited the late fees, their case deserved reconsideration. The Court disagreed with the revenue's suggestion to remand the matter to the Appellate Authority. Instead, the Court set aside the appellate order dated 14.06.2024 and the rejection order dated 26.12.2023. The matter was remitted to the Assistant Commissioner, Purnea-1, to consider the application for revocation of cancellation afresh and pass an appropriate order within two months. The Court found that the petitioner's case warranted reconsideration on merits.

Facts

The petitioner, M/s Galaxy Heights, sought to set aside an order dated 14.06.2024 by the Joint Commissioner (Appeals) which dismissed their appeal on grounds of limitation. This appeal was against an ex-parte order dated 16.10.2023 by the Superintendent, CGST & CX, Purnea Division, cancelling the petitioner's GST registration without providing an opportunity for hearing and without stating reasons. Subsequently, the petitioner's application for revocation of this cancellation, filed on 31.10.2023 after furnishing pending returns, was rejected by the Assistant Commissioner, CGST Purnea, via an order dated 26.12.2023, citing non-payment of late fees. The petitioner claims illness prevented timely filing and appeals. The revenue argued that returns were not filed at the time of cancellation and late fees were not deposited at the time of revocation application rejection.

Key Issues

1. Whether the order dated 14.06.2024 passed by the Joint Commissioner (Appeals) dismissing the petitioner's appeal on the ground of limitation is sustainable, particularly in light of the circumstances leading to the delay in filing the appeal. (Mixed question of law and fact, concerning principles of natural justice and procedural fairness). 2. Whether the ex-parte order dated 16.10.2023, cancelling the petitioner's GST registration, is valid, given the alleged lack of opportunity for hearing and absence of stated reasons. (Question of law, concerning Section 29(2) of the CGST Act and principles of natural justice). 3. Whether the rejection of the petitioner's revocation application dated 26.12.2023, solely on the ground of non-payment of late fees at the time of filing the application, is justified, especially when the petitioner subsequently paid the late fees. (Question of law, concerning Section 30 of the CGST Act and the discretion of the authority). Petitioner's arguments: The petitioner contended that illness caused delays in filing returns and appeals. They argued that the cancellation order was ex-parte and non-speaking, and the revocation application was rejected without proper consideration, despite subsequent compliance with late fee payments. They relied on the principle that cancellation of registration can lead to 'civil death' for a business. Revenue's arguments: The revenue argued that returns were not filed when registration was cancelled and late fees were not deposited when the revocation application was rejected. They suggested remanding the matter to the Appellate Authority for fresh consideration.