Mahadeb Chandra Nag vs. Deputy Commissioner, Budge Budge Charge And Ors.
Original PDF →Facts
The petitioner, Madhab Chandra Nag, filed a writ petition challenging the order dated 27th October, 2021, passed by the Deputy Commissioner, Budge Budge Charge, cancelling his GST registration. The cancellation was based on the petitioner's failure to file returns for a continuous period of six months. The petitioner contended that he intended to comply with the Act but failed to submit a timely response to the show cause notice. He relied on a previous judgment of the Calcutta High Court in Subhakar Golder v. Assistant Commissioner of State Tax, Serampore Charge, where similar cancellations were set aside on conditions. The respondents argued that the cancellation was justified due to non-compliance and the lack of a proper reply to the show cause notice.
Held
The Court held that the cancellation of the petitioner's GST registration was based on non-filing of returns. It was not alleged that the petitioner was engaged in tax evasion. The Court recognized that revoking a registration can be counterproductive, hindering tax recovery as the petitioner would be unable to issue invoices. The Court found that the respondents could not determine the final liability without the petitioner filing his returns. Following the directions issued in the case of Subhakar Golder, the Court proposed to set aside the cancellation order dated 27th October, 2021. This was made conditional upon the petitioner filing all pending returns for the period of default and paying the requisite amount of tax, interest, fine, and penalty within four weeks of receiving the order. The Court directed the respondents to activate the portal within one week to facilitate the petitioner's compliance. If the petitioner fails to comply, the writ petition would stand dismissed.
Key Issues
1. Whether the order of cancellation of GST registration dated 27th October, 2021, passed by the Deputy Commissioner, Budge Budge Charge, is liable to be set aside, considering the petitioner's failure to file returns for a continuous period of six months, and in light of the principles laid down in Subhakar Golder v. Assistant Commissioner of State Tax, Serampore Charge. Petitioner's arguments: The petitioner argued that he was interested in complying with the GST Act and that his failure to file a response to the show cause notice was an oversight. He relied on the judgment in Subhakar Golder, where similar cancellations were set aside subject to the petitioner filing all pending returns and paying the requisite tax, interest, fine, and penalty. He sought a similar relief. Revenue's arguments: The respondents contended that the petitioner had not complied with the statutory provisions, leading to the cancellation of his registration. They asserted that an opportunity to show cause was provided, and since no proper reply was received, the cancellation was justified and carried out without irregularity.
Sections Cited
Central/West Bengal Goods and Services Tax Act, 2017
AI-generated summary — verify with the full judgment below
M/L 256 24.09.2024 sb Ct 5
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE
WPA 20472 of 2024
Madhab Chandra Nag Versus The Deputy Commissioner, Budge Budge Charge & Ors.
Mr. Rajarshi Chatterjee
... For the petitioner.
Mr. Anirban Ray, Ld. GP
Mr. T. M. Siddiqui
Mr. T. Chakraborty
Mr. D. Sahu
Mr. S. Sanyal
… For the State.
The present writ petition has been filed, inter alia, challenging the order of cancellation of registration of the petitioner dated 27th October, 2021, 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 30th August, 2021 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. Chatterjee, 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 by reasons of his failure to file appropriate response the aforesaid fact could not be brought to the notice of respondents.
By placing reliance on a judgment of the Hon’ble
2 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 this Court may be pleased to set aside the order of cancellation and allow the petitioner to file his returns on the same terms.
Mr. Sanyal, learned advocate appearing on behalf of the respondents on the other hand submits that the petitioner had not complied with the statutory provisions and it is for such reason, the registration of the petitioner under the said Act was cancelled.
According the respondent authorities the petitioner was given opportunity to show cause. Since, no proper reply to the show cause was given by the petitioner the authorities had cancelled the registration. There is no irregularity on the part of the 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 petitioner had been adopting dubious process to evade tax. Taking note of the fact that the suspension/revocation of
3 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 27th October, 2021 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.
For the purpose of compliance of the above directions, the respondents are directed to activate the portal within
4 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.)
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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.