M/S National Rural And Mountain Tribal Development Association vs. The Union Of INDIA

Held

The Court held that the cancellation of the petitioner's GST registration under Section 29(2)(c) of the CGST/BGST Act was legally valid. The Court found that the petitioner had received the show cause notice and had replied to it, explaining the reasons for non-filing of returns, which included lack of communication at the office level. The Court noted that the petitioner was given an opportunity to be heard and that the impugned order for cancellation was passed after approximately seven months from the issuance of the show cause notice. Crucially, the Court observed that the petitioner did not deny the respondents' specific case that pending returns with admitted tax were neither filed nor paid even by the date of the initial cancellation order. The Court found no illegality in the initial cancellation order dated 03.07.2020. Regarding the appeal, the Court found that the appellate authority correctly dismissed the appeal on the ground of limitation, as it was filed approximately four years after the initial order. The Court also noted that the petitioner did not avail the amnesty scheme offered by the government for restoration of cancelled registrations. The Court distinguished the petitioner's case from the cited judgments, noting that in M/S Ambey Refrigerator, the cancellation order lacked reasons, and in M/S New Elegant Homes Planners and Developers, there was a violation of Section 169 leading to denial of hearing, unlike the present case. Therefore, the Court found no reason to interfere with the impugned orders.

Facts

The petitioner, M/s National Rural and Mountain Tribal Development Association, sought to quash an order dated 09.10.2024 by the Additional Commissioner, CGST & CX (Appeals), Patna, which upheld an earlier order dated 03.07.2020 by the Superintendent, CGST & CX, Phulwarisharif Range, cancelling the petitioner's GST registration. The cancellation was based on the petitioner's failure to file returns since June 2018, despite a show cause notice issued on 27.11.2019 and a reply submitted by the petitioner on 06.12.2019. The petitioner's appeal was dismissed by the appellate authority solely on the ground of limitation, as it was filed approximately four years after the initial cancellation order. The petitioner also failed to avail an amnesty scheme for registration restoration.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST/BGST Act for non-filing of returns is legally valid when the petitioner had provided reasons for non-filing and the show cause notice was replied to. 2. Whether the appellate authority erred in dismissing the appeal solely on the ground of limitation, given the circumstances of the case. Petitioner's Arguments: The petitioner argued that the cancellation order was passed without appreciating the facts and circumstances, and relied on co-ordinate bench judgments in M/S Ambey Refrigerator Vs. The State of Bihar and Others (CWJC No. 6292 of 2023) and M/S New Elegant Homes Planners and Developers Pvt. Ltd Vs. The State of Bihar and Others (CWJC No. 1709 of 2025) where similar cancellations were set aside. Revenue's Arguments: The revenue contended that the petitioner received the show cause notice and replied, distinguishing it from cases where notices were not served. They argued that the petitioner had ample opportunity to file pending returns but failed to do so. Regarding the appeal, the revenue cited Sections 107(1) and 107(4) of the CGST Act, 2017, asserting that the appellate authority could not condone delays beyond the statutory limit, and the appeal was filed almost four years late. They also referred to the Supreme Court judgment in Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur.