Mukesh Singh vs. State Of Madhya Pradesh

Held

The Court held that while a show cause notice was issued on August 12, 2024, and an order of cancellation was passed on October 14, 2024, indicating that an opportunity of hearing was provided, the petitioner's plea of facing adversity and his desire to re-enter the tax regime was considered. The Court acknowledged that it would be in the interest of the department to bring the petitioner back into the formal economy to ensure regular tax compliance. Therefore, the impugned order dated October 14, 2024, was set aside. The petitioner was directed to submit all pending GST returns, especially for the period when the registration was cancelled. Upon submission of these returns, the Authority was to consider the case for revocation of registration, if permitted by law. As a consequence of the default, the petitioner was directed to pay a cost of Rs. 50,000/- to the department along with the pending returns. The Court emphasized that this order was passed in the peculiar facts and circumstances of the case.

Facts

The petitioner, Mukesh Singh, proprietor of "Jai Mahakal Construction", had his GST registration cancelled by the Assistant Commissioner of State Tax, Bhind, on October 14, 2024, due to non-submission of GST returns. The petitioner contended that he did not receive a sufficient opportunity of hearing. He stated that due to multiple health ailments, he was unable to pay attention to his business and file returns. He further submitted that he would not be prejudiced if granted a chance to revoke the registration and restart his business, even with a cost imposed. The respondents argued that sufficient opportunity of hearing was provided and the petitioner could apply for fresh registration.

Key Issues

1. Whether the petitioner was provided with a sufficient opportunity of hearing before the cancellation of his GST registration, as per the provisions of the Central Goods and Services Tax Act, 2017 and Rules, 2017? Petitioner's contention: The petitioner argued that he was not given a sufficient opportunity of hearing, which prevented him from explaining the reasons for non-furnishing of returns. Revenue's contention: The respondents (State of Madhya Pradesh and others) argued that the petitioner was indeed given sufficient opportunity of hearing, referencing Sections 25, 29, and 30 of the CGST Act, 2017, and Rules 21(a) and (h), 22, and 23 of the CGST Rules, 2017. They suggested the petitioner could apply for fresh registration.