Mohammad Hassan Zahid vs. Union Of INDIA - Karnataka High Court, 17 March 2022

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF MARCH, 2022 BEFORE THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD WRIT PETITION NO.20851/2021 [T-RES] BETWEEN : 1 . MOHAMMAD HASSAN ZAHID S/O BAJPE ZAKRIA AGED ABOUT 23 YEARS, PROPRIETER, ZAK AND SONS SUPERMARKET GROUND FLOOR, DOOR NO.2-3-27B, NARAYANA GURU SANKEERANA, BANNANJEU, MOOODANIDAMBUR VILLAGE, UDUPI, DAKSHINA KANNADA, KARNATAKA 576101. ... PETITIONER (BY SMT. VANAJA M. R. ADVOCATE) AND : 1 . UNION OF INDIA REP. BY SECRETARY, MINISTRY OF FINANCE, NEW DELHI 110001. 2 . THE STATE OF KARNATAKA REP. BY ITS ADDL.CHIEF SECRETARY, MINISTRY OF FINANCE 11TH FLOOR, VIDHANA SOUDHA, BENGALURU-560 001 2 3 . THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES GROUND FLOOR, VANIJA TERIGE BHAVANA, LOCAL GOODS AND SERVICES TAX OFFICE - 280 UDUPI. ... RESPONDENTS (BY SMT.PRATHIBHA R., CGC FOR R1; SRI.K.HEMAKUMAR, AGA FOR R2 AND R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO

QUASH THE BEST JUDGEMENT ASSESSMENT ORDER PASSED BY RESPONDENT NO.3 DATED 24.05.2019 VIDE ANNEXURE-B AND TO DIRECT RESPONDENT NO.3 TO RE- CONSIDER THE PETITIONER’S CASE FOR REVOKING THE CANCELLATION OF REGISTRATION DATED 03.06.2019, AND 24.05.2019 TO ENABLE THE PETITIONER TO FILE RETURNS VIDE ANNEXURES-D AND B, ETC.

THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:-

O R D E R The petitioner has impugned the Best Judgment Assessment order dated 24.05.2019 and also cancellation of the registration by order dated 03.06.2019 which is admittedly after the show-cause notice of the even date. The Best Judgment Assessment Order, an order under Section 62(1) of the Karnataka

3 Goods and Services Tax / Central Goods and Services Tax Act, 2017 reads inter alia as follows: “You are also informed that if you furnish the return within a period of 30 days from the date of service of this order, the order shall be deemed to have been withdrawn; otherwise, proceedings shall be initiated against you after the aforesaid period to recover the outstanding dues.”

The learned counsel for the petitioner submits that the petitioner met with an accident in the month of July-2019 and was hospitalised. He was constrained to travel out of India as his parents reside abroad and he could not therefore either avail the benefit as indicated in the Assessment Order or the opportunity in terms of the show cause notice dated 24.05.2019. Therefore, the petitioner has also not been able to avail the statutory remedy as against the judgment and hence, this Court should be persuaded to quash the cancellation order dated 03.06.2019 and restore the proceedings to the third respondent viz., the

4 Assistant Commissioner of Commercial Taxes, to re- consider the cancellation of the registration with due opportunity, and also to consider the petitioner’s request for enlargement of time for filing the returns as provided under the Assessment Order subject to the just consequences.

Sri.K.Hemakumar, learned Additional Government Advocate for the second and third respondents, submits that because of the special circumstances relied upon by the petitioner, the third respondent could consider the question of cancellation of the registration after due opportunity to the petitioner, but insofar as the request to consider the enlargement of time allowed by the Assessment Order to file returns, he submits that it would be impermissible for want of statutory provisions.

The rival submissions are considered in the light of the undisputed facts viz., the petitioner meeting with an accident; that the petitioner was hospitalized and traveling abroad to recover; and that the cancellation of registration ought to have been preceded by an opportunity of hearing. Further, the Assessment Order is dated 24.05.2019 and the show-cause notice is also dated 24.05.2019, and this despite the fact that the assessment order reading that, if the petitioner files returns within 30 days, the order shall be deemed to be withdrawn. It is, therefore, obvious that the opportunity allowing thirty days’ time to file returns is actually on paper without a real opportunity.

These circumstances, in this Court’s considered view, constitute special circumstance where admittedly the petitioner was constrained to avail the opportunities extended to file returns and also show cause against cancellation. Therefore, the following:

6 ORDER (i) The petition is allowed in part; (ii) The cancellation of registration vide Order dated 03.06.2019 at Annexure ‘D’ is quashed and the proceedings restored for re-consideration by the third respondent; (iii) The petitioner, without further notice, shall appear before the third respondent on 07.04.2022; (iv) It shall be open to the petitioner to seek for enlargement of time as provided for under the Assessment Order dated 24.05.2019 and the third respondent shall consider the same in the special circumstances discussed but subject to the consequences envisaged in law. JUDGE

RK/- Ct: SN