M/S. Car-Maa (Jv) vs. The Union Of INDIA

WP/33485/2021HC TelanganaGSTCNR HBHC01052174202122 April 2022Bench: SUREPALLI NANDA,UJJAL BHUYAN7 pages

For Petitioner: SRl. C HANUMANTHA RAOFor Respondent: M/S. DOMINIC FERNANDES (SENIOR, STANDING COUNSEL FOR CBIC)

AI SummaryAllowed

Facts

The petitioner, M/s. CAR-MAA (JV), a joint venture engaged in construction works, had its GST registration bearing No. 36AACAC8979RLZO cancelled by the 4th respondent (Superintendent of Central Tax) on 05.02.2019. The cancellation was based on the petitioner's failure to file GST returns continuously for more than six months. The petitioner had submitted a reply to the show cause notice on 27.10.2021. Aggrieved by the cancellation order, the petitioner filed an appeal before the 2nd respondent (Joint Commissioner of Central Tax and GST (Appeals-I)). This appeal was rejected on 16.11.2021 on the grounds that it was barred by limitation under Section 107(1) of the Central Goods and Services Tax Act, 2017. The petitioner then filed a writ petition before the High Court seeking to quash these orders.

Held

The High Court held that it would be in the interest of justice to restore the GST registration of the petitioner. Consequently, the Court set aside the order dated 05.02.2019, which cancelled the petitioner's GST registration, and the appellate order dated 16.11.2021, which rejected the appeal. The Court reasoned that while the appeal was indeed filed beyond the prescribed limitation period, the circumstances presented by the petitioner, including business disruptions and the pandemic, warranted a lenient approach. The Court found that the cancellation of registration and the subsequent rejection of the appeal had caused undue hardship. As a result, the attachment of the petitioner's bank account was ordered to be withdrawn. The Court also noted that if any dues were owed by the petitioner, the respondents were at liberty to issue appropriate notices in accordance with the law. The Court explicitly stated that it was only concerned with the cancellation of GST registration and the rejection of the appeal.

Key Issues

1. Whether the order dated 05.02.2019 cancelling the petitioner's GST registration under Section 29(2) of the Central Goods and Services Tax Act, 2017, is erroneous, illegal, unlawful, unsustainable, and against the principles of natural justice? 2. Whether the appellate order dated 16.11.2021, rejecting the petitioner's appeal on the grounds of limitation under Section 107(1) of the Central Goods and Services Tax Act, 2017, is erroneous, illegal, unlawful, highhanded, malafide, and violative of Articles 14, 19, 21, and 300-A of the Constitution of India? Petitioner's arguments: The petitioner contended that the delay in filing the appeal was due to adverse business situations in Andhra Pradesh, continuous disruption in business activities, a prior writ petition (W.P.No.29919 of 2018) where the court directed respondents not to interfere with contract works, and the outbreak of COVID-19 and subsequent lockdown. The petitioner also claimed that its bank account was attached, adversely affecting its operations. Furthermore, the petitioner argued that as on the date of the writ petition, there was no tax liability, referencing the cancellation order itself as evidence of this. Respondents' arguments: The respondents did not explicitly argue on the merits of the cancellation or the appeal's limitation. Instead, their counsel suggested that the bank be directed to pay outstanding tax dues directly to the authorities, after which the attachment could be withdrawn.

Sections Cited

Section 29(2), Section 107(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) FRIDAY ,THE TWENTY SECOND DAY OF APRIL TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE SRI JUSTICE UJJAL BHUYAN ANI) THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETI TION NO: 33 485 0F 2021 Between: AND Mis. CAR-MAA (JV), Rep. bv its AOP member Surakanati Anantha Reddy' Sio. iui" Surakanti Yadagiri Reddy Aged about 51 years' occ Railway contractor, R/o. House "No.4-9 -8b617: lecturers colony. Road No.78. Hiyuthrigut, Ranga Reddy District, Telangana State' ...PETITIONER The Union of lndia, Rep. by its Secretary to Finance'Jeevandeep Building,sansad Marg, New Delhi' The Commissioner of Central Tax' Ranga Reddy' GST Commissionerate' Hyderabad. The Deoutv/Assistant Commissioner of Central Tax' Nagole GST oiri.i.iin',iiiri;neoov csr commissionerate, Hvderabad The Suoerintendent of central Tax, Nagole GST Division,Ranga Reddy GST Commissionerate, HYderabad. 1 2 3 4 ...RESPONDENTS Pefition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith' the High Coufl may be pleased to issue a writ or order one in the nature of writ of mandamus declartng that the orders of tne arn rLsion dent dl.Sl121201g is erroneous, illegal. unlawir:l unsustainable and againsi tire principles of natural justice before,resorting to cancellation of registration' ,ni tn" conf irmation of the same by the 2nd respondent commissioner'in leiecting the appeal instead of setting aside the orders of the superintenouni oitlnttui tax' Nagole' GST Division' Ranga Reddy District and co nseq u entty 'sut uriJ" the orders Lt tf," +tf, respondent as aff i.rmed by the second responOent -a!' ' miioty, illegal' unlawful' highhanded and malafide ultr urO violative of 14, 19, 21 and 3bO-A of the constitution of lndia' IANO:1OF2 21 Petition under section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to direct the respondents to restore the GST number 36AA/ACACB979RIZO so has to receive the pending amounts from the 4th respondents and to pay GST by furnishing the returns, to receive lhe 7% GST due, interesl arld any applicable late fees from the 4th respondent and also lo pay 12o/o to the government Dending disposal of the above writ petition. l,A NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the afficlavrt filed in support of the petition, the High court may be pleased to pass orders of the 2nd respondent in making request to the branch Manager vide its lette, HeAE: No. BO/2020-RR dated 14-12-2020 addressed to the Branch [,4anager M/s Bank of lndia, Dilsukhnagar Branch so as to avoid continuous undue hardship to the petitioner firm and its workmen. Counsel for the Petitioner:SRl. C HANUMANTHA RAO Counsel for the Respondent No' 1: SRl. N. RAJESHWAR RAO, ASST' SOLICITOR GENERAL Counsel for the Respondent Nos. 2 to 4: M/S. DOMINIC FERNANDES (SENIOR STANDING COUNSEL FOR CBIC) The Court made the following: / / THE HONOURABLE SRI JUSTICE UJJAL BHUYAN AND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION No.33485 of 2O2l

ORDER: (Per Hon'ble Sn Jrrstice Uljal Bhuyan) Heard Mr. C.Hanumantha Rao, learned counsel for the petitioner and Mr. Dominic Fernandes, learned counsel for respondent Nos.2 to 4. 2. B1' filing this petition ul.rder Article 226 of the constitr-rtion of Incli:1, petitioner sccl<s quashing of orrlcr d:rit-rl 05.02.2019 passeci ltY thc :+'i' l-csjlon(le t t.zrncelllng llrt (ir;ocis ancl St'rvices Tzix (GST) re'gistration o1' tl-rc lletrtiorlcr as $'ell as orde r clertecl 16.11 .2021 passccl br, the .Joint cr)mrlllssloncI of Central Ta-r & GST (Appeals-l) rejecting the appc:rl ol "irc petitioner.

Be it stated that petitioner is a joint venture carrying on various construction works including works contract' It had GST registration bearing No.36AACAC8979RLZO' On the ground that petitioner was not fiting GST returns regularly, show cause notice was issued to the petitioner as to u'hy its )

GST registration should not be cancelied' Petitioner had submitted reply on 27.1O.2O21. On the ground that petitioner had failed to file GST returns continuously for more than six months, the GST registration of the petitioner was cancelled by the 4rr, respondent uide the order dated 05.02.2019 issued under Section 29(21 of the Central Goods and Services Tax Act, 2017. 4. Aggrieved b1' the said order, petitioner preferred appeal. Joint Commissioner of Central Tax and GST (Appeals-l) r.,rrJe the orcler derted 16.11.2021 rejected the appeal on the ground that the appeal rvas barred by limitation under Section 107(1) of the Central Goods and Services Tax Act, 2017. 5. Learned counsel for the petitioner submits that there was delay in filing the appeal because of adverse business situation faced by the petitioner in the State of Andhra Pradesh' In this connection, learned counsel for the petitioner submits that because of continuous disruption in petitioner's business nctir,ities, he had to approach this Court b1' filing W P.No.29919 of 2O 18. This Court had passed an order therein oll I I

J UB,J & SN'J

23.08.

2018 to the effect that respondents should not interfere with the execution of contract works by the petitioner as per contract agreement. There u'as further deiay on account of outbreak of COVID- 19 pandemic and the resultant lock dori'n' He sr-rbmits that because of attachment ol bank accoltnt of the petitroner, it has been adverselv aflected' 6, Learnecl cor-tnsel for the respondents submits that the bank mav be directed to pa)' the outstanding tax dues of the petitioner directlv to the ta-x attachment maY be withdrawn' authortties,',vhereaiter the 7'Learnedcounselforthepetitionerinreplysubmits that as on date, there is no tax liability to be paid by the petitioner. He has referred to the order dated 05'02'2019 wheieby the GST registration of the petitioner was cancelled to say therefrom that there was no tax liability'

Be that as it maY, in this rvrit petition' n'e are onlv concerned u'ith ctrncellation of GST registration of the pctitroncr and the related rejected ol appeal' t ! r\/

4 clnc consideration, \\'e are of thc vieu, that it n ould onlv be in the interest of justicc if GST registration of the pctitioner is restored. Consequently, \ve set aside the order dated 05.O2.2019 as affirmed by the appellate order dated W.P. No.33485 of 2t)2 1

Altcr hearing lealned counsel for the parties and on 16.11.2021. Resultantly, attachment of bank account ol the petitioner sha1l be withdrawn. If there are any dues of the petitioner, it would be open to the respondents to issue appropriate notice to the petitioner in accordance with lau,.

10.

This disposes of the Writ Petition. Hou,ever, there shall be no order as to costs. I i. As a sequel, miscellaneous applicaticurs pendrrrg, ii an-r', in this Wlit Petition, sl-rzrll stand closed //// T.SRINIVAS ASSISTANT REGISTRAR SECTION OFFICER To, 1. , 3. 4. 6. 7 The Secretary to Finance, Union of lnd ia 'Jeevandeep Building'sansad Marg' New Delhi. The Commissioner of Central Tax' Ranga Reddy' GST Commissionerate' Hvderabad. til"n..ii"ln.sistant Commissioner of Central Tax' Nagole GST oiiiJ,c,ilniiisr-i;;ov csr commissionerate'Hvderabad' The Superintenoent ot cent'Iiiu*' rl"lof" GST Division'Ranga Reddy GST Commissionerate, HYderabad o;; CC to sri. C Hanumantha Rao' Advocate [OPUC] One CC to Sri.N. Ralesnwai Rao' Asst Solicitor G^eneral IOPUCI one cC to M/S. DoMlNlc;;iiNiNDis' senio' Standing counsel for cBlc TOPUCI

HIGH COURT DATED:2210412022 ORDER WP.No.33 485 of 2021 DisPosing of the WP Without costs' T4 H { o E 0 ,J U J N 20u PAI * a) o S=

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