Gajanana Krishna Hegde vs. The Assistant Commissioner Of

Held

The Court allowed the petition in part. It held that the petitioner, who pleaded bonafides for failing to respond to the Show Cause Notice, should be given another opportunity. This opportunity is conditional upon the petitioner offering to pay all applicable tax, penalty, and interest as justified by law. The Order of Cancellation of GST dated 11.11.2024 was quashed, restoring the proceedings for reconsideration. The petitioner was granted liberty to file a response to the Show Cause Notice dated 08.10.2024 by 30.10.2026, along with the pending returns and offering the required tax, demand, and interest.

Facts

The petitioner, Gajanan Krishna Hegde, a proprietorship, filed a writ petition challenging the cancellation of his GST registration. The Assistant Commissioner of Commercial Taxes issued a Show Cause Notice dated 08.10.2024, followed by an Order of Cancellation of Registration dated 11.11.2024. The cancellation was based on the petitioner's failure to file GST returns continuously for over six months. The petitioner contended that he had provided his accountant's email, but the accountant, due to low turnover, did not follow up, and the petitioner, due to bonafide reasons, also failed to follow up.

Key Issues

1. Whether the cancellation of GST registration under Rule 21A(2A) of the CGST Rules, 2017, is justified when the petitioner pleads bonafide reasons for non-compliance and seeks an opportunity to rectify the situation? The petitioner argued that he relied on bonafide circumstances and, if given an opportunity to respond to the Show Cause Notice, he would file the pending returns and demonstrate bonafides by paying the due tax, penalty, and interest. The respondent, represented by the High Court Government Pleader, was heard.