Rahul Behera vs. The Superintendent, Range-I, Joka Division And Ors.
Original PDF →Facts
The petitioner, Rahul Behera, filed a writ petition challenging an order dated February 28, 2023, which cancelled his GST registration. The cancellation was based on the petitioner's failure to file returns for a continuous period of six months. The petitioner received a show cause notice on January 15, 2023, regarding this non-compliance. The petitioner contended that he intended to comply but failed to communicate this effectively to the authorities. He relied on a previous High Court judgment in Subhakar Golder v. Assistant Commissioner of State Tax, where a similar cancellation order was set aside under certain conditions. The respondents argued that the petitioner did not file a proper reply to the show cause notice, nor did he file a revocation application or an appeal, asserting no irregularity in their action.
Held
The Court held that the order cancelling the petitioner's GST registration should be set aside, subject to specific conditions. The Court noted that the cancellation was solely on the ground of non-filing of returns and not due to any tax evasion. It reasoned that suspending or revoking a registration can be counterproductive, as it prevents the petitioner from raising invoices and impacts the revenue's ability to recover taxes. Therefore, a pragmatic approach was deemed necessary. The Court found that unless returns are filed, the final tax liability cannot be determined. Citing the Division Bench's direction in Subhakar Golder (supra), the Court proposed to set aside the cancellation order provided the petitioner files all pending returns and pays the requisite tax, interest, fine, and penalty within four weeks of receiving the order. The jurisdictional officer is directed to restore the registration upon compliance. Failure to comply will result in the writ petition being automatically dismissed. The portal is to be activated within one week to facilitate compliance.
Key Issues
1. Whether the order of cancellation of the petitioner's GST registration, passed under the Central/West Bengal Goods and Services Tax Act, 2017, is liable to be set aside, considering the petitioner's failure to file returns for a continuous period of six months and his subsequent submission to comply. The petitioner argued that the cancellation order should be set aside, similar to the precedent in Subhakar Golder v. Assistant Commissioner of State Tax. He contended that he was willing to comply with the Act and sought to file his returns and pay all dues, including tax, interest, fine, and penalty, on the same terms as in the cited case. The respondents argued that the cancellation was justified as the petitioner failed to file a proper reply to the show cause notice, did not file a revocation application, and did not file an appeal. They asserted that their actions were regular and that the petitioner's non-compliance led to the cancellation.
Sections Cited
Section 158
AI-generated summary — verify with the full judgment below
M/L 253 25.09.2024 sb Ct 5
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE
WPA 20429 of 2024
Rahul Behera Versus The Superintendent Range-I, Joka Division & Ors.
Mr. Debanuj Basu Thakur
... For the petitioner.
Ms. Manasi Mukherjee
Mr. K. K. Maiti
… For the State.
Copy of the show cause notice for cancellation of registration dated 15th January, 2023, filed in Court today on behalf of the petitioner is taken on record.
The present writ petition has been filed, inter alia, challenging the order of cancellation of registration of the petitioner dated 28th February, 2023, passed under the Central/West Bengal Goods and Services Tax Act, 2017 (Hereinafter referred to as the “said Act”).
It is the petitioner’s case that on or about 15th January, 2023, the petitioner was served with a show cause as to why the registration of the petitioner under the said Act shall not be cancelled for the petitioner having failed to file his returns for a continuous period of six months.
Mr. Basu Thakur, learned advocate appearing for the petitioner submits that the petitioner was and is all along interested to comply with the provisions of the said Act unfortunately the aforesaid fact could not be appropriately
2 brought to the notice of respondents.
By placing reliance on a judgment of the Hon’ble Division Bench of this Court delivered in the case of Subhakar Golder versus Assistant Commissioner of State Tax, Serampore Charge (MAT 639 of 2024) on 9th April 2024, it is submitted that in similar circumstances, similar order of cancellation of registration had been set aside, subject to the condition that the petitioner files returns for the entire period of default, pays requisite amount of tax, interest, fine and penalty. He submits that his Court may be pleased to set aside the order of cancellation and allow the petitioner to file his returns on the same terms.
Ms. Mukherjee, learned advocate appearing on behalf of the respondents on the other hand submits that in the instant case although a show cause notice was issued since, the petitioner did not file any proper reply, the registration was cancelled. The petitioner did neither file any revocation application nor did the petitioner file any appeal. According the respondent authorities, there is no irregularity on the part of the respondent authorities in cancelling the registration.
Heard the learned advocates appearing for the respective parties and considered the materials on record.
Admittedly, I find that the registration of the petitioner had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the
3 petitioner had been adopting dubious process to evade tax. Taking note of the fact that the suspension/revocation of license would be counterproductive and works against the interest of the revenue since, the petitioner in such a case would not be able to carry on his business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax, I am of the view that the respondents should take a pragmatic view in the matter and permit the petitioner to carry on his business.
I find from the submissions made by the respondents that unless, the petitioner files his returns, the respondents cannot determine the final liability.
Having regard to the aforesaid and taking note of the direction issued by the Hon’ble Division Bench of this Court in the case of Subhankar Golder (supra), I propose to set aside the order dated 28th February, 2023 cancelling the registration of the petitioner subject to the condition that the petitioner files his returns for the entire period of default and pays requisite amount of tax, interest, fine and penalty.
It is made clear that if the petitioner complies with the directions/conditions noted above, within 4 weeks from the date of receipt of the server copy of this order, the petitioner’s registration under the said Act shall be restored by the Juri ictional Officer. However, if the petitioner fails to comply with the directions as aforesaid, the benefit of this order will not enure to the petitioner and the writ petition would stand automatically dismissed.
4
For the purpose of compliance of the above directions, the respondents are directed to activate the portal within one week from date, so that the petitioner can file his returns, pays requisite amount of tax, interest, fine and penalty.
With the above direction and observations, the writ petition is disposed of without any order as to costs.
All parties to act on the basis of the server copy of this order duly downloaded from this Hon’ble Court’s official website.
Urgent photostat certified copy of this order, if applied for, be made available to the parties upon compliance of necessary formalities.
(Raja Basu Chowdhury, J.)
5
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.