Tvl. Teju Constructions vs. The Commissioner Of Commercial Taxes

Held

The Court allowed the writ petition, setting aside the impugned order dated May 17, 2022, cancelling the petitioner's GST registration. The Court found that the petitioner, a small-scale entrepreneur, would suffer great hardship without GST registration, affecting their right to livelihood. The Court noted that the statutory appeal was dismissed on technical grounds. Citing the Bombay High Court's decision in WP.No.11833 of 2022, the Court held that GST enactment provisions cannot be interpreted to deny the right to trade and commerce, which is a constitutional guarantee. The Court also referred to Suguna Cutpiece Vs. Appellate Deputy Commissioner (ST) (GST), stating that no useful purpose would be served by keeping the petitioner out of the GST regime. The Court directed the petitioner to file returns for the period prior to cancellation, along with any outstanding tax, interest, penalty, and fees, within six weeks from the date of receiving the order. The Court also issued detailed directions regarding the payment of dues, utilization of Input Tax Credit, and the revival of registration, with the respondents to take steps within thirty days.

Facts

The petitioner, Teju Constructions, a proprietor engaged in contract and construction works, filed a writ petition challenging the cancellation of its GST registration by an order dated May 17, 2022. The cancellation was due to non-filing of GST returns. The petitioner's proprietor claimed that he engaged a private accountant for filing returns and, due to ill-health and failure to follow up with the accountant for over six months, the returns were not filed. The petitioner also stated that the show cause notice dated April 28, 2022, was not within his knowledge as it was issued online, and he is not an educated person. An appeal filed by the petitioner was not entertained due to the absence of a certified copy of the cancellation order. The respondents contended that the petitioner was given sufficient opportunities and a show cause notice was issued, to which the petitioner failed to respond.

Key Issues

1. Whether the cancellation of the petitioner's GST registration, based on non-filing of returns, is sustainable given the petitioner's claims of ill-health, reliance on an accountant, and lack of knowledge of the online show cause notice, thereby impacting their right to carry on trade under Article 19(1)(g) and Article 21 of the Constitution of India? Petitioner's arguments: The petitioner argued that the cancellation of registration, a "capital punishment" to traders, unduly curtails their right to livelihood. They relied on the Bombay High Court's decision in WP.No.11833 of 2022, which emphasized that GST provisions should not deny the right to trade and commerce, and that constitutional guarantees must be enforced. The petitioner also cited Suguna Cutpiece Vs. Appellate Deputy Commissioner (ST) (GST) for the principle that no useful purpose is served by keeping a petitioner out of the GST regime. Respondent's arguments: The respondent contended that the petitioner was provided with sufficient opportunities, including the issuance of a show cause notice on April 28, 2022, and sufficient time to respond. As the petitioner failed to respond, the cancellation order was passed under the GST Act, and thus, there was no reason to interfere with the impugned order.