Tvl. Sankar Cables vs. The Commissioner Of Commercial Taxes

Facts

The petitioner, Tvl. Sankar Cables, filed a writ petition seeking revocation of the cancellation of its GST registration (GSTIN.33FNWPS7270E1ZC). The registration was cancelled by the Assistant Commissioner via an order dated 07.01.2022. The petitioner contended that within 45 days of registration, it was required to furnish bank account details as per Rule 10(a) of the CGST Act. However, due to pending KYC formalities with the bank, the petitioner could not upload the details. A show cause notice was issued on 01.11.2021, but the petitioner could not appear on 15.11.2021 due to the bank's delay. The cancellation order was subsequently issued on 07.01.2022 without providing an opportunity for a hearing. The respondents argued that the petitioner failed to respond to the show cause notice and revocation notice, and instead filed a writ petition, bypassing the prescribed appeal mechanisms.

Held

The Court directed the petitioner to upload/provide the Aadhaar card particulars. Upon the petitioner providing all details and particulars to the satisfaction of the Department, the registration, which was cancelled, is to be revoked and restored to the petitioner. This would enable the petitioner to continue its business with the registration. The Court reasoned that since the petitioner has now uploaded the bank account details and is in the process of providing Aadhaar details, and the respondents' counsel had no objection to this course of action, it was appropriate to allow the petitioner to complete the formalities. The writ petition was disposed of with these directions. The ratio decidendi is that where a taxpayer demonstrates a bona fide attempt to comply with GST requirements, and the delay is attributable to external factors or can be rectified, the High Court may intervene to ensure compliance and allow for the restoration of registration, provided the taxpayer cooperates with the authorities.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the Assistant Commissioner, dated 07.01.2022, is liable to be quashed for non-compliance with principles of natural justice, specifically the lack of a proper opportunity for hearing, given the petitioner's inability to furnish bank account details within the stipulated time due to bank-related issues. Petitioner's contention: The petitioner argued that the cancellation order was passed without affording a proper opportunity of hearing. The delay in uploading bank details was attributable to the bank, and the petitioner attempted to rectify the situation after obtaining clearance. The petitioner relied on the fact that bank account details have now been uploaded. Respondents' contention: The respondents argued that the petitioner failed to comply with Rule 10(a) of the CGST Act by not uploading bank particulars within 45 days. They further contended that the petitioner did not respond to the show cause notice and revocation notice, and instead directly approached the High Court, bypassing the statutory remedies of revocation before the Assistant Commissioner and appeal before the Deputy Commissioner.