Govind Jee Dairymilk PVT. LTD. vs. Central Goods And Services Tax Authorities
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The petitioner, Govindjee Dairymilk Pvt. Ltd., filed two writ petitions. In the first (Writ Petition No. 6988/2023), the petitioner challenged a show-cause notice for cancellation of GST registration, alleging it did not provide the mandatory 7 and 30 days' notice as per GST Rules. An interim order on May 25, 2023, stayed the cancellation. In the second petition (Writ Petition No. 14715/2023), the petitioner challenged the issuance of a fresh show-cause notice dated August 7, 2023, while the earlier notice was pending and a writ petition was sub judice. The petitioner also sought to pay GST dues in installments under Section 80 of the CGST Act, having already paid Rs. 30,00,000/-. The respondent admitted technical glitches in the first show-cause notice. The Commissioner had refused the installment payment request, citing Rs. 4 Crores in GST dues against the petitioner.
Held
The Court held that the first show-cause notice and the consequential cancellation order were liable to be quashed because the mandatory period of 7 and 30 days, as provided under Sections 22(1) and 21A(2-A) of the GST Rules, was not granted to the petitioner. The Court noted that the petitioner's registration had continued due to an interim order. Regarding the second issue, the Court found no bar under the CGST Act for issuing a fresh show-cause notice when the earlier one was sub judice, especially when the effect of the impugned cancellation order was stayed. Therefore, the prayer to quash the fresh show-cause notice was not entertained. On the third issue, the Court observed that the Commissioner had already passed an order refusing the installment payment of GST dues, and this order was not under challenge before the High Court. The Court also noted that the petitioner, despite having substantial GST dues, was not paying them and was seeking installments, leading to the rejection of the application by the Commissioner. Thus, the Court found no error in the impugned order and dismissed the writ petition.
Key Issues
1. Whether the show-cause notice for cancellation of GST registration, which failed to provide the mandatory 7 and 30 days' notice as stipulated in Sections 22(1) and 21A(2-A) of the GST Rules, 2017, is liable to be quashed? The petitioner argued that the mandatory periods were not granted. The respondent admitted technical glitches in the notice. 2. Whether the issuance of a fresh show-cause notice by the respondent, while an earlier show-cause notice was pending before the Court and a writ petition was sub judice, is permissible under the CGST Act and GST Rules? The petitioner contended that a fresh notice should not have been issued. The respondent argued that there is no bar under the CGST Act for issuing a fresh notice. 3. Whether the petitioner is entitled to pay the GST dues in installments under Section 80 of the CGST Act, despite the Commissioner's refusal? The petitioner prayed for installment payments. The respondent stated that the Commissioner had already refused the installment payment, and this order was not under challenge.
Sections Cited
Section 22(1), Section 21A(2-A), Section 80
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Cause title — parties, addresses and appearances
Order 07/05/2024
Petitioner has filed Writ Petition No.6988/2023 alleging therein that the show-cause notice for cancellation of GST
[2024:RJ-JP:21660-DB] (2 of 4) [CW-14715/2023] registration issued to the petitioner does not grant time as provided under Sections 22(1) and 21A(2-A) of the Central Goods and Services Tax Rules, 2017 (for short ‘GST Rules’) i.e., the mandatory period of 7 days & 30 days. It is further contended that an interim order was passed on 25.05.2023 wherein effect and operation of impugned order of cancellation was stayed, till the next date of hearing.
It is admitted by learned counsel for the respondent that due to technical glitches there was some error in the show-cause notice.
We have considered the contentions.
Since the mandatory period provided for under the GST Rules was not given to the petitioner, the show-cause notice as well as the cancellation order issued in pursuance thereof, derserves to be, and is accordingly quashed. Since, the registration of the petitioner has continued in pursuance of the interim order passed by the Court on 25.05.2023, hence, nothing now remains, as the show-cause notice is being quashed by the Court.
Petitioner has filed Civil Writ Petition No. 14715/2023 alleging that the respondents were not free to issue fresh show- cause notice in accordance with the provisions of the Central Goods and Services Tax Act (for short ‘CGST Act’) and the GST Rules.
It is contended by learned counsel for the petitioner that a show-cause notice was issued on 07.08.2023, even when the earlier show-cause notice was not withdrawn by the respondent and a writ petition in that regard was pending before the Court.
[2024:RJ-JP:21660-DB] (3 of 4) [CW-14715/2023]
It is also contended that petitioner has moved an application before the authorities for permitting the petitioner to pay the Goods & Services Tax (for short, “GST”) dues in installment. A prayer is made before the Court that the dues may be paid in installment in accordance with Section 80 of CGST Act. It is further contended that an amount of Rs.30,00,000/- has already been paid by the petitioner.
Learned counsel appearing for the respondent has opposed the writ petition. It is contended that there is no bar under the provisions of the CGST Act for issuance of fresh notice. It is also contended that the Commissioner, in exercise of the powers under Section 80 of the CGST Act, has refused the payment of GST dues in installments and the same order is not under challenge before this Court. It is further contended that an amount of Rs.4 Crores of GST dues is due against the appellant.
We have considered the contentions.
We are of the considered view that there is no bar in the provisions of the CGST Act wherein a fresh show-cause notice cannot be given when the earlier show-cause notice is sub judice before the Court. More particularly, when the effect and operation of the impugned order of cancellation was kept in abeyance by the Court by an interim order, the issuance of fresh show-cause notice cannot be said to be de hors the provisions of the Act. Consequently, prayer with regard to quashing and setting aside the show-cause notice cannot be entertained.
As regards payment of the GST dues in installments is concerned, an order has been passed by the Commissioner of the GST. Petitioner, who is stated to be in possession of around Four
[2024:RJ-JP:21660-DB] (4 of 4) [CW-14715/2023] crores of rupees of GST, is not paying the GST dues and is claiming the payment of dues in installment. The GST dues are due from the year 2022. Had there been any intention of the petitioner to pay the dues in installments, there was no restriction on the petitioner from paying the GST dues. Hence, the application for paying the tax in 12 equal installments was rejected by the Commissioner, GST on 11.09.2023. 12. In view of the above, we do not find any error in the impugned order so as to entertain the present writ petition.
Accordingly, this civil writ petition is dismissed. (SHUBHA MEHTA),J (PANKAJ BHANDARI),J LAKSHYA-DAKSH/57-58
Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.