M/S Paramhansa Projects vs. State Of West Bengal And Ors.
Original PDF →Facts
The petitioner, M/s Paramhansa Projects, filed a writ application challenging the order dated December 15, 2022, cancelling its 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 it intended to comply with the Act but failed to file a response to the show cause notice. The State respondents argued that the petitioner did not comply with statutory provisions and that the cancellation was justified as no reply was filed to the show cause notice. The petitioner sought to set aside the cancellation order, relying on a previous High Court judgment in a similar case.
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 involved in tax evasion. The Court reasoned that suspending or revoking registration would be counterproductive and detrimental to revenue collection, as the petitioner would be unable to raise invoices and consequently, tax recovery would be impacted. Therefore, a pragmatic view was necessary to permit the petitioner to continue its business. The Court noted that the respondents could not determine the final liability without the petitioner filing its returns. Following the directions issued in the case of *Subhankar Golder*, the Court proposed to set aside the cancellation order dated December 15, 2022. This was made conditional upon the petitioner filing all pending returns and paying the requisite 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.
Key Issues
1. Whether the order of cancellation of GST registration for non-filing of returns for a continuous period of six months is liable to be set aside, considering the petitioner's submission of intending to comply and the potential impact on revenue collection. The petitioner argued that it was interested in complying with the GST Act and that its failure to respond to the show cause notice was an oversight. It relied on the Division Bench judgment in *Subhakar Golder v. Assistant Commissioner of State Tax* to argue that cancellation orders in similar circumstances were set aside, subject to conditions like filing pending returns and paying dues. The petitioner requested similar relief. The State respondents argued that the petitioner had failed to comply with statutory provisions and had not filed a reply to the show cause notice, making the cancellation of registration a valid action by the authorities. They asserted that there was no irregularity in the cancellation process.
Sections Cited
Central/West Bengal Goods and Services Tax Act, 2017
AI-generated summary — verify with the full judgment below
Form No.J(2)
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE Present:
The Hon’ble Justice Raja Basu Chowdhury
WPA 15089 of 2024
M/s Paramhansa Projects Versus The State of West Bengal Ors.
For the petitioner : Mr. Siddhartha Dasgupta
Mr. Souvik Guha
For the State
: Mr. Anirban Ray, Ld. GP
Mr. T. M. Siddiqui
Mr. Tanoy Chakraborty
Mr. D. Sahu
Heard on
: 6th August, 2024
Judgment on : 6th August, 2024. Raja Basu Chowdhury, J:
The present writ application has been filed, inter alia, challenging the order of cancellation of registration of the petitioner 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 November, 2022, the petitioner was served with a notice of show cause as to why the registration of the petitioner under the said Act shall not be cancelled
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for the petitioner having failed to file its returns for a continuous period of six months.
Mr. Dasgupta, 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 its failure to file response the aforesaid fact could not be 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 and interest and fine and penalty. He submits that this Court may be pleased to set aside the order of cancellation and allow the petitioner to file its returns on the same terms.
Mr. Siddiqui, learned advocate appearing on behalf of the State 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 reply to the show cause was given by the petitioner, the authorities had cancelled the registration.
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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 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 its 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 its business.
I find from the submissions made by the respondents that unless, the petitioner files its 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 15th December, 2022 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 and interest and fine and penalty.
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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 one week from date, so that the petitioner can file its 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.) sb.
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.