M/S Narayan Mandal vs. The Union Of INDIA

CWJC/1236/2024HC PatnaGSTCNR BRHC01002039202423 January 2024Bench: MR. JUSTICE RAJIV ROY,THE CHIEF JUSTICE-4 pages

AI SummaryDismissed

Facts

The petitioner, M/s Narayan Mandal, is aggrieved by the cancellation of its GST registration, as per an order dated 01.09.2021 passed by the Assistant Commissioner of State Tax, Katihar Circle. The petitioner admits to having an appellate remedy but availed it with significant delay. The order of cancellation was based on the petitioner not filing returns for a continuous period of six months. The petitioner did not dispute receiving the show-cause notice or the fact that returns were not filed for the specified period. The appeal was filed on 09.03.2023, approximately eight months after the extended limitation period expired, even considering the Supreme Court's directions for limitation extension due to the pandemic.

Held

The Court held that it would not invoke its extraordinary jurisdiction under Article 226 of the Constitution. The primary reason was the availability of an effective alternate remedy, which the petitioner had failed to pursue diligently within the prescribed time limits. The Court noted that the petitioner had availed the appellate remedy with gross delay, filing the appeal approximately eight months after the extended limitation period expired. The Court emphasized that the law favors diligent individuals and not those who are indolent. Regarding the grounds for cancellation, the Court observed that the petitioner did not dispute receiving the show-cause notice or the fact that returns were not filed for a continuous period of six months. The Court found no reason to entertain the writ petition and consequently dismissed it. No issue was expressly left undecided.

Key Issues

1. Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India when an alternate appellate remedy is available, and the petitioner has failed to diligently avail it within the stipulated time? 2. Whether the petitioner's failure to file returns for a continuous period of six months, as stated in the show-cause notice, constitutes a valid ground for cancellation of registration? Contentions: Petitioner: The petitioner relied on the judgment in CWJC No.16203 of 2022, M/s Best Bricks v. The Union of India & Ors., where a similar situation of delayed approach to the appellate authority was considered. The petitioner argued that despite the delay, the writ petition should be entertained. Revenue/State: The respondents contended that the petitioner had an effective alternate remedy and had not been diligent in pursuing it. They argued that the law favors diligent assessees and that the petitioner's failure to file returns for six months was not disputed.

Sections Cited

Section 107

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.1236 of 2024 ====================================================== M/s Narayan Mandal (A Sole Proprietor Ship Firm), Having its Registered Office at- Barari, P.S- Katihar Sadar, District- Katihar through its legal heir Mr. Ajay Kumar, S/o Late Narayan Madal, aged about- 33 Years (M), resident of Market Barari, P.S.- Katihar Sadar, Dist.- Katihar. ... ... Petitioner/s Versus 1. The Union of India through the Secretary, Ministry of Finance, Department of Revenue, having its office at Room No. 46, North Block, P.O. and P.S. North Block, New Delhi- 110001. 2. The Chief Commissioner, CGST and CX, Office at C.R. Building, 1st Floor, Bir Chand Patel Path, Patna, Bihar. 3. The State of Bihar, through Commissioner, BGST, New Secretariat, Patna. 4. Joint Commissioner of State Tax, Katihar Circle, Purnea Division, Bihar. 5. Assistant Commissioner of State Tax, Katihar Circle, Purnea Division, Bihar. 6. Additional Commissioner (Appeal) of State Tax, Purnea Division, Purnea. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Anurag Saurav, Advocate For the Union of India : Dr. K. N. Singh, ASG Mr. Anshuman Singh, Sr. SC, CGST & CX For the State : Mr. Vikash Kumar, SC-11 ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE RAJIV ROY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 23-01-2024 The petitioner is aggrieved with the cancellation of registration by Annexure-P/3 order passed on 01.09.2021. 2. Admittedly, there is an appellate remedy which 2/4 the petitioner availed with gross delay.

Section 107 of the Bihar Goods and Services Tax Act, 2017 (“BGST Act” hereafter) permits an appeal to be filed within three months and also apply for delay condonation with satisfactory reasons within a further period of one month. We have to take into account the saving of limitation granted by the Hon’ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020, In Re: Cognizance For Extension of Limitation therein, due to the pandemic situation limitation was saved between 15.03.2020 till 28.02.2022. It was also directed that an appeal could be filed within ninety days from 01.03.2022. Here, the order impugned in the appeal was dated 01.09.2021. An appeal was to be filed on or before 30.06.2022 as permitted by the Hon’ble Supreme Court and if necessary with a delay condonation application within one month thereafter. The appeal is said to have been filed only on 09.03.2023, after about eight months from the date on which even the extended limitation period expired. In the above circumstances, we find no reason to invoke the extraordinary juri iction under Article 226, especially 3/4 since it is not a measure to be employed where there are alternate remedies available and the assessee has not been diligent in availing such alternate remedies within the stipulated time. The law favours the diligent and not the indolent.

The petitioner does not have any case that the show-cause notice was not received by him. Further, it is also pertinent that the reason stated in the show-cause notice for cancellation of registration is that the petitioner has not filed returns for a continuous period of six months. The petitioner does not have a case that he had in fact filed a return in the continuous period of six months.

The petitioner points out judgment dated 09.12.2022 passed in CWJC No.16203 of 2022 titled as M/s Best Bricks v. The Union of India & Ors. annexed as Annexure-5. Therein also the petitioner did not approach the appellate authority within time. In the present case also, the petitioner has approached the appellate authority but with long delay. There is no averment in the writ petition also that the ground stated in Annexure-P/2 that the tax payer has not filed returns for a continuous period of six 4/4 months is false.

We find no reason to entertain the writ petition and the same would stand dismissed.

Sunil/- (K. Vinod Chandran, CJ) (Rajiv Roy, J) AFR/NAFR NAFR CAV DATE Uploading Date 24.01.2024 Transmission Date

Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.