M/S Darshanlal Rawat Construction Through Authorized Officer Darshan Rawat vs. Principal Secretary Government Of M.P.

Held

The Court held that while the petitioner was provided with an opportunity of hearing and the appellate authority dismissed the appeal on grounds of delay, the petitioner faced adversity and wished to re-enter the tax regime. The Court considered it in the interest of both the department and the revenue to bring the petitioner back into the formal economy to ensure regular tax compliance. Consequently, the impugned orders dated 07/11/2022 (cancellation of registration) and 13/08/2024 (dismissal of appeal) were set aside. The petitioner was directed to submit all pending GST returns, especially for the period when registration was cancelled. Upon submission of these returns, the authority was to consider the case for revocation of registration. 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 clarified that this order was passed in the peculiar facts and circumstances of the case.

Facts

The petitioner, M/s Darshanlal Rawat Construction, a proprietorship firm, filed a writ petition challenging an order dated 13/08/2024 passed by the Commissioner (Appeals), Customs & Central Excise, Bhopal. This order rejected the petitioner's appeal against an earlier order dated 07/11/2022, which had cancelled the firm's GST registration. The petitioner attributed the non-submission of GST returns from 2021 to adverse family circumstances, leading to the cancellation. The petitioner contended that they were not given sufficient opportunity of hearing. The respondents argued that the petitioner was given sufficient opportunity and could apply for fresh registration. The High Court noted that a show cause notice was issued, a reply was filed, and an order cancelling registration was passed. The appeal was dismissed by the appellate authority on grounds of delay.

Key Issues

1. Whether the petitioner was denied a sufficient opportunity of hearing before the cancellation of their GST registration, as per the relevant provisions of the Central Goods and Services Tax Act, 2017 and Rules, 2017? 2. Whether the order of cancellation of registration and the subsequent appellate order rejecting the appeal on delay are sustainable in light of the petitioner's submission regarding adverse family circumstances and their willingness to regularize pending returns and pay costs? Petitioner's arguments: The petitioner argued that they were not afforded a sufficient opportunity of hearing. They stated that if given a chance, they could explain their reasons for non-submission of GST returns and would not be prejudiced if a cost was imposed and a chance for revocation of registration was granted. Respondents' arguments: The respondents referred to Section 25, 29, and 30 of the Central Goods and Services Tax Act, 2017, and Rule 21(a) and (h), Rules 22 and 23 of the Central Goods and Services Tax Rules, 2017. They contended that the petitioner was given sufficient opportunity of hearing and could apply for fresh registration.