Srr Enterprises vs. The Additional Commissioner (Appeals-Ii)
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The petitioner, SRR Enterprises, challenged an order dated 08.08.2023 passed by the Additional Commissioner (Appeals-II), which rejected their appeal against an order dated 25.03.2023. The original order had revoked the petitioner's GST registration. The petitioner admitted to delays in filing GST returns and in filing their appeal. They attributed the delay in returns to administrative reasons related to their work as a civil work contractor, where payments were received on an ad-hoc basis. The petitioner expressed willingness to pay any applicable late fees. They argued that restoring their registration was necessary to enable them to file future returns and pay regular taxes.
Held
The Court allowed the writ petition, setting aside both the appellate order dated 08.08.2023 and the order of cancellation of GST registration dated 25.03.2023. The matter was remitted back to Respondent No. 3 (The Superintendent) for fresh consideration regarding the restoration of the petitioner's GST registration. The Court reasoned that the petitioner's willingness to pay late fees for delayed returns, coupled with the principles laid down in the Delhi High Court's judgment in *Kritika Agarwal vs. Union of India* and a similar decision by the same High Court, warranted a pragmatic approach. The Court emphasized that cancellation should not be a mechanical process. It was made clear that the petitioner must pay all applicable late fees as per rules and circulars. Furthermore, the issue of limitation should not impede the petitioner's approach to Respondent No. 3 for registration restoration. No issue was expressly left undecided.
Key Issues
1. Whether the cancellation of GST registration, in light of admitted delays in filing returns and appeal, was arbitrary and in violation of principles of natural justice, particularly concerning Section 129 of the CGST Act (though not explicitly named, the context of cancellation and restoration implies provisions related to compliance and penalties). Petitioner's Arguments: - The delay in filing returns was due to administrative reasons and they are willing to pay late fees. - Cancellation of GST registration is not beneficial to the department as it prevents the petitioner from filing future returns and paying taxes. - Relied on the Delhi High Court's decision in *Kritika Agarwal vs. Union of India*, which held that GST cancellation must be exercised with circumspection and not mechanically. - Cited a similar decision by the Telangana High Court in W.P.No.36174 of 2022, where an appellate authority's order was set aside and the matter remanded. Revenue's Arguments: - The admitted delays in filing returns and the appeal justify the order passed by the authority, which is not contrary to law.
Sections Cited
Section 129
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Cause title — parties, addresses and appearances
The Court made the following: ORDER t WRIT PETITION NO: 25671 OF 2023
HONOIIRABLE SRI JUSTICE P.SAM :KOSHI AND HON'BLE SFI JUSTICE LAXMI NARAYANII, ALIISIIETTY WRIT PETITION NO.25671 OF 2023 ORDER: (per Hott'ble Sri Justice P.Sam Koshy) The challerrge in the writ petition is to the order:l appeal, dated O8.08.2O2.), whereby the appeal by the t,etitionr:r ergainst the order in o'iginal, dated 25.O3.2023, fcr rerrocation of cancelation of G iT registration of the petitioner stoo<l r'ejected.
Learned crrunsel for the petitioner in this ,:ase has admitted two things, i) that there was a delan, on his prart in filing the returns and ii) that there rvas also delay on his part so far as liling of e .ppeal is concerned. Nonethet-.ss, thr: harned counsel for the :etitioner submits that t}re delay at the first instance in Iiling of the returns took place on a(:count ,rf c:ertain administrative r )asons, ',l,here the work e)i:ecut€:d by the petitioner, who iri otherwise is a civil work contractrtr, used to receive the paym ents on od hoc basis periodi<:ally arLd in the process, there was a delay that occurred. l,eanecl courrsel ibr the petitioner also sr bmits that the petitioner is also reacty t.o pay whatever is the lz.te fee or othenvise, which are required fcr not having filed a retrrrn within the stipulated period. It war; also the PSK,J& LNA,J lrP No.25671 of 202 3 2 contention of the learned counsel for the petitioner that cancellation of GST registration of the petitioner is not going to benefit the respondent-Department in any manner for the reason that unless the registration part is restored, the petitioner would not be in a position to further submit the GST returns and pay the regular taxes under the GST law. 3. l.earned counsel for the petitioner relies upon the decision of Hon'ble Delhi High Court in the case of Kritika Agarwal vs. Union of India aad othetsl, wherein the High Court in the case of cancellation of GST registration had observed that "the measure of cancellation of GS? must be exerci.sed uith circum.spection and onlA in cases, uhere it is necessary", This in otherwise means that the intention of the Hon'ble Delhi High Court by allowing the writ petition was that the authorities concern should take a more pragmatic approach so far as the case where GST registration is concerned and cancellation should not be resorted in a mechanical ma-nner or as a matter of routine. Similar decision has also been passed by Division Bench of this Court in W.P.No.36l74 of 2022 urde order dated 2O.O9.2O21, where the Division Bench had set-aside the order of t w.p.(c) 9424/2023 and CM No5-36000/2023 &36001/2023 I I
t f PSI:.J& LNA,J wl No.25671 of2023 3 tJle appellate aul hority and the matter had beerr rem arlde,l back for fresh conside -ation on its own merits..
Learned cc unsel for the Department, on the oflter hand, contends that sirrce there is an admitted delay on the p,art of the petitioner both at the first instance of filing of the returns and then at the time of liling of the appeal, the order passed by the authority cannot said to be in any manner contrary to law.
Having heard the contentions put-forth on either sitle and on perusal of the record, given submission by thr: k:arned counsel for the petitioner that petitioner is read5' to pay whatever is the late fee as per the Rules so far as th,: delayed submission of re turns is concerned. Taking into conside ration the judgment of the Hon'ble Delhi High Court in thrr case of Kritika Agarwal (supra), we are inclined to sr:t-asiCe' ttre two orders i.e., the inrpugned order of the appellate author.t5z, dated 08.08.2023 and the order of cancellation of CiST r,:gistration, dated 25.03.2021i and remit the matter back to the :respc,ndent No.3 to conside r the request of the petitioner so Iar as restoration of reg stration is concerned.
It goes without saying that the petitioner rvould be required to pay vhatever is the late fee under the Rules and PSKJ& LNA.J WP No.25671 o[2023 Circulars governing the freld so far as the delayed submission of returns is concerned. It is also made clear that since we have remitted it back to the respondent No.3, the question of the limitation should not come in the way of petitioner so far as approaching the respondent No.3 seeking for restoration of registration of GST is concemed.
The Writ Petition stands allowed. There shall be no order as to costs.
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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.