M/S.Sheeshmahal Enterprises Private Limited vs. Superintendent Of Central Tax

WP/8344/2023HC TelanganaGSTCNR HBHC01015428202328 March 2023Bench: N.TUKARAMJI,UJJAL BHUYAN6 pages

For Petitioner: Ms. S. ARUNA SREE, COUNSL FOR, SRI S. SURI BABUFor Respondent: Ms. B. SAPNA REDDY

AI SummaryRemanded

Facts

The petitioner, M/s. Sheeshmahal Enterprises Private Limited, a company engaged in motion picture projection services, had its Goods and Services Tax (GST) registration cancelled by the Superintendent of Central Tax (respondent No. 1) on March 25, 2021. This cancellation was based on a show cause notice dated March 6, 2021, alleging non-submission of returns for the preceding six months. The petitioner claims it did not receive this show cause notice due to the COVID-19 situation and therefore could not submit a reply. However, respondent No. 1's order noted consideration of a reply dated March 18, 2021, which the petitioner denies submitting. An appeal filed by the petitioner before the Additional Commissioner Appeals (respondent No. 2) was rejected on January 30, 2023, on the grounds of delay. The petitioner then filed a writ petition before the High Court challenging both orders.

Held

The Court found merit in the petitioner's submission that it did not receive the show cause notice dated March 6, 2021, and therefore could not submit a reply. The Court noted a discrepancy in the order of respondent No. 1, which stated that a reply dated March 18, 2021, was considered, despite the petitioner's claim of non-receipt. This indicated a mechanical approach by respondent No. 1 and a lack of application of mind. Consequently, the Court held that to meet the ends of justice, the matter should be reconsidered by giving the petitioner an opportunity to show cause and be heard. The orders dated March 25, 2021, and January 30, 2023, passed by respondents No. 1 and 2 respectively, were set aside. The matter was remitted back to respondent No. 1 for a fresh order after providing due opportunity of hearing to the petitioner. The petitioner was directed to file its reply within fifteen days from the date of the order. During the remand proceedings, the petitioner would be at liberty to file its GST returns. The entire exercise was to be completed within three months from the date of receipt of the petitioner's reply. If no reply was filed, respondent No. 1 could pass an appropriate order. The issue of whether the appeal rejection on grounds of delay was justified was implicitly addressed by setting aside the order and remitting the matter.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by respondent No. 1, dated March 25, 2021, was arbitrary, illegal, and vitiated by a violation of the principles of natural justice, particularly concerning the alleged non-receipt of the show cause notice and the contradictory recording of a reply. 2. Whether the rejection of the petitioner's appeal by respondent No. 2, dated January 30, 2023, on grounds of delay, was justified, given the petitioner's contention of not receiving the initial show cause notice. Petitioner's arguments: The petitioner argued that it did not receive the show cause notice dated March 6, 2021, and therefore could not submit a reply. The recording of a reply dated March 18, 2021, and its consideration by respondent No. 1 was a mechanical approach, indicating a non-application of mind. The cancellation order and subsequent appeal rejection were thus illegal and against natural justice. Revenue's arguments: The judgment does not record any specific arguments made by the respondents.

Sections Cited

Article 226 of the Constitution of India

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[ 33{{ I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY EIGHTH DAY OF MARCH TWO THOUSAND AND TWENW THREE PRESENT THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 83,14 OF 2023 Between: M/s.Sheeshmahal Enterprises Private Limited, Sheesh Mahal Talkies, 7-'l - 95/2, Ameerpet, Hyderabad - 500 016, Telangana, represented by its Managing Director, Sri Trilok Chand. ...pETl,oNER AND1. Superintendent of Central Tax,, Ameerpet ll Range, Ameerpet GST Division, Hyderabad, Telangana. 2. Aiiditional Commi5sioner Appeals - 1,, Office of the Commissioner of Customs and Central Tax, Appeals - 1, Hyderabad Commissionarate, 7th Floor, GST Bhavan, LB Stadium Road, Basheerbagh, Hyderabad - 500 O0-1*=a.o*or*r" Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ or order or direction particularly one in the nature of Writ of Mandamus setting aside the impugned appeal rejection order passed by the second respondent passed in Appeal No.11112022-HYD(GST)JC, in Order-in- Appeal No. HYD-GST-HYC-APP1-083-22-23-GST, in DIN No.20230156DM0000722747,dated 30.01.2023, read with Order for Cancellation of Registration of the first respondent in Reference No.2A3603211350034, dated 25.03.2021, as arbitrary, illegal, vitiated against the principles of natural justice, and contrary to the law laid down by this Hon'ble Court lA NO: 1 OF 2023 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 pending disposal of the Writ Petition, suspend the operation of the appeal rejection order passed by the second respondent in Appeal No.11'112022-HYD(GST)JC, in Order-in-Appeal No. HYD-GST-HYC-APP1-083-22-23-GST, in DIN No.20230156DM0000722747, dated 30.01 .2023, in cancelling the GSTN Registration Certificate Number 36AAGCT2146M1Z2 of lhe petitioner company Counsel for the Petitioner: Ms. S. ARUNA SREE, COUNSL FOR SRI S. SURI BABU Counsel for Respondents: Ms. B. SAPNA REDDY

,THE ]IoN'BLE THE CHIEF IUSTICE UIIAL It-i!UYAN AND -,F:E HON'BLE SRI JUSTICE N.TL KARTry(II W.P.No.8344 of 2023 ORDI-8 !', ,tt L bl r.. r h ilnti.e t jtI |tt,ky.tn) flcarcl \{s. S.Aruna Srce, lcarncd counsel ftr the petttloncr and l\ls. B.Sa rna Rcddy, learned counsel for the respondr:nts

IJ,.' filir'g this petition trndcr Article 22r> of th.,. C,xstitutron ol India, per tr,rncr has assailed lcgahry and validity of thc order detccl 21.t.).1..0.)1 passcd by rcspondent No.1 an3 tht: ordcr-in- elrpcaI ciatcd 'Ct 0i.2023 passccl by rcspondcnt No.2,

Bv rhc ftlst order dated 25.03.2021, Gc,ods z.n,l Service 'l'ax (OS1'r r,'gist rrion of thc petiuoncr wzrs cancellcd u hereas br, the sccond rrrcle; latcd 30.01.2023, appeal hlcd by he petitroner against such : rr cellation o[GS']'registration u.as rerr:r.ted

Pr'utio:'er is a limrted company engaged in r.,l e business o[ motion pictt c ptojection scrviccs. [rollowirrg enat:tmr:nt of the ( iST' lc4sla, ons, tt has got itse [[ registered 'ri:h thc GS-I' ,rrrtlr()r itics 1.rz -irrg rcgistrauon No.3(rA AGCT2I46M1 ,12. i I i

Sho,"v cause notice dated 06.03.2021 was issued bv respondent No.1 to the petitioner to show cause as to whf its GS'I' registration should not be cancelled for non-submlssion of rerurns for the last six months. According to the peritioner, because o[ COVID-19 situation, it could not file the GST returns. But io so far the show cause notice dated 06.03.2021 is concerned, it is stated that petitioner did not receivc the said show causc notice and therefore, could not submit any reply. However, respondent No.1 recorded that he had considered the reply of the petitioncr dated 18.03.2021 but found the samc to be not satisfactory. Therefore, the impugned order dated 25.03.2021 was passed cancelling the GST registration of thc petitioncr

5.1.

Appeal filed by the petitioner before respondent No.2 was rejected on the ground of delay aide the order-in-appeal datcd 30.01.2023. 6. Hence, the writ petition. ..r..

3 I i I 7. $."hr,r'r irt:uric.,nei has rnadc a submission on r;ath that it did not rec(rivc L r( sh()w clusc notice dated 06.03.:20111 an:l thct-cforc could r rct ICCCIPl ()t SLI( r rbmit anv rcplv, rve fail to undcrstzr d as to how respoflc e ni ' Jr' .1 could have rccorded in the impt 13ned order that petition3( h I submrtted rcply on 18.03.2021 ancl tLat he had considc-cd tt e said reply. 'l'his oniy goes to shou t re rrechanicai approacl'r ad precl by rcspondent No.1 and reflects n,rn- app.lication of rnind 8 Rr: rha ar; ir ma1', sincc thc GST regrsuauon.,rf thr petlfloner has becn carr:e cd in exercise <'tf suo motu p,)wcrs l.y rcspondcnt No.1, wc arc o.t thc vicw that it would meet the errcls of jusucc if thc erer,:ise: r r edone by giving an opportunily to r;lr,)w cause and hcaring to thrr p rtitioncr .wC set asidc the orders dated 2!:.03.2021 and 30.(11,.2(p-3 prssccl b1, respondcnts No.1 ancl 2 r,:,il;ectjvely and remit thc mat e: I>ack to thc ftlc of responde nt Nr. l. Petitioner A c corc nr;ly, 9 ! I shall filc reyr .r.irhtn a pcriod of Frltccn da','s [rc ur tr.,cla1'. On rcplv, rcspondcnt No.1 shal-l pass a [::esh ordcr in 4 accordance with law but after giving due opportuniry oF hcarrng to the pctitioner.

1 During the remand proceedings, it would be open to the pctitioner to f,rle its GST returns.

10.

Let the above exercise be completed within a period o[ thrce rnonths from the date of receipt of reply by the petitioner tl. However, i[ no rcply is hied by thc petruoner, it wculd bc opcn to respondent No.1 to pass appropriate order in accordance with law. 1,2. Writ Petition is accordingly disposed of' No costs. As a sequel, miscellaneous petitions, pending if any, stand dslcd To, %'!=ilftY'f=t['ffE ,*i.H{t},;,iltffi ##u"*;:""ri"rJ'"* 1 2. 3

MBC GJP,,J Two CD CoPies

I t [{IGH COURT DATHD: 2810312023 .,1: 1r-- slA 6' T \ e )) \ 01 ir,[Y ?tr/] i \:. DISPOSING OF THE WI?.IT PETITION ORDER WP.Ncr.8344 ot 2023 s,t WITTIOUT COSTS

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.