Som Traders vs. State Of Rajasthan
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The petitioner, Som Traders, through its proprietor Somesh Agrawal, filed a writ petition challenging the cancellation of its Goods and Services Tax Identification Number (GSTIN). The cancellation orders were passed by the Original Authority on 09.11.2022 and upheld by the Appellate Authority on 06.01.2023. The petitioner's counsel submitted that the delay in GST payment was due to financial hardship caused by the proprietor's wife suffering from cancer. The petitioner acknowledged the delay but argued that permanent cancellation of the GSTIN would infringe upon their right to livelihood under Article 21 of the Constitution. The petitioner expressed willingness to pay all determined liabilities. The respondents acknowledged the crisis but emphasized that revenue loss due to delays is unacceptable, though they would consider restoring the GSTIN if all dues were cleared.
Held
The Court held that in the given factual matrix, it would be appropriate to restore the GSTIN of the petitioner-firm. The reasoning was based on the petitioner's submission of financial hardship due to a family medical emergency and their willingness to clear all outstanding dues. The Court found that permanent cancellation of the GSTIN would significantly impact the petitioner's right to livelihood. The Court quashed and set aside the impugned orders dated 09.11.2022 and 06.01.2023. The operative direction was for the respondents to restore the GSTIN of the petitioner-firm upon the petitioner clearing all necessary dues under the GST Law. No issue was expressly left undecided.
Key Issues
1. Whether the cancellation of the petitioner's GSTIN is justified in light of the circumstances presented, particularly the financial hardship due to a family medical emergency, and if such cancellation infringes upon the right to livelihood under Article 21 of the Constitution of India. Petitioner's Arguments: The petitioner argued that the cancellation of their GSTIN, due to delays caused by severe financial hardship stemming from a family medical crisis (wife's cancer), is disproportionate. They contended that permanent cancellation would violate their fundamental right to livelihood under Article 21 of the Constitution. They also stated their readiness to clear all outstanding GST liabilities as determined by the respondents. They relied on the judgment in M/s Bhagwati Collection and Handloom Vs. State of Rajasthan & Ors. Respondents' Arguments: The respondents argued that any revenue loss to the GST department due to the petitioner's delays is unacceptable. However, they indicated openness to restoring the GSTIN if all due payments were made, acknowledging the reported reason for non-payment as a crisis like cancer.
Sections Cited
Article 21
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
Order 23/05/2024
The petitioner has preferred the present writ petition claiming the following reliefs:- “It is, therefore, humbly prayed that the present writ petition may kindly be allowed with cost and the order dated 09.11.2022 (Annex.4) and order passed by the Appellate Authority dated 06.01.2023 (Annex.2) may kindly be quashed and set-aside and the respondent department may kindly be directed to revoke the cancellation of petitioner firm. Any other appropriate order or direction which this Hon’ble Court may deem just and proper may also be passed in favour of the petitioner. Cost of the writ petition may also be awarded in favour of the petitioner.”
Mr. Rajendra Singh Rathore, learned counsel representing the petitioner submits that vide order dated 09.11.2022 passed by the Original Authority and order dated 06.01.2023 passed by the
[2024:RJ-JD:23419-DB] (2 of 3) [CW-7713/2024] Appellate Authority, the Goods and Services Tax Identification Number (for short, 'GSTIN') of the petitioner-Firm has been cancelled. He urges that the petitioner was prevented from making payment of GST on time because the wife of the petitioner (proprietor of the Firm) was suffering from cancer, which resulted in a financial hardship.
Learned counsel admits that there is a delay on the part of the petitioner-firm, but at the same time, submits that in case the GSTIN is permanently cancelled, it would directly infringe upon the petitioner's right to conduct business in the future, resulting in deprivation of their right to livelihood as enshrined under Article 21 of the Constitution of India.
Learned counsel also submits that the petitioner-firm is prepared to pay every kind of liability arising out of the GST Law, as determined by the respondents.
Learned counsel has referred to the judgment of M/s Bhagwati Collection and Handloom Vs. State of Rajasthan & Ors. (D.B. Civil Writ Petition No.280/2023), rendered on 03.02.2023. 3. Mr. Hemant Dutt, learned counsel for the respondents submits that any kind of revenue loss to the GST due to the delays on the part of the petitioner would be unacceptable, but at the same time, if the complete due payments are made, the respondents shall be open to restoring his GSTIN, particularly when the crisis like that of cancer has been reported to be the reason of non-payment.
In view of the submissions advanced at bar, this Court feels that in the given factual matrix, it would be appropriate to restore
[2024:RJ-JD:23419-DB] (3 of 3) [CW-7713/2024] the GSTIN of the petitioner-firm, if they clear all necessary dues under the GST Law with the respondents.
Thus, the present petition is allowed and the impugned orders dated 09.11.2022 & 06.01.2023 are quashed and set aside and accordingly, the respondents are directed to restore the GSTIN of the petitioner-firm after all the necessary dues, under the GST Law, which are applicable upon the present petitioner- firm, are duly paid. (YOGENDRA KUMAR PUROHIT),J (DR.PUSHPENDRA SINGH BHATI),J 8-sudheer/-
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.