M/S Gour Group Through Its Partner Shri Vinod Kumar vs. The State Of Madhya Pradesh
Held
The Court held that while a show cause notice was issued on 13.01.2023 and a reply was filed by the petitioner, leading to the cancellation order on 13.02.2023, it was not a case where no opportunity of hearing was provided. However, considering the petitioner's adversity and desire to re-enter the tax regime, the Court found it beneficial for the revenue to bring the petitioner back into the formal economy for regular tax collection. Therefore, the impugned order dated 13.02.2023 was set aside. The petitioner was directed to submit all pending GST returns, particularly 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 peculiar facts and circumstances.
Facts
The petitioner, M/s Gour Group, a construction firm, had its GST registration cancelled by the Assistant Commissioner of Sales Tax, Morena, vide an order dated 13/02/2023. The cancellation occurred because the petitioner failed to submit GST returns from 2022, attributed to an inadvertent mistake by their accountant. The petitioner contended that they were not given a sufficient opportunity of hearing. The respondents, the State of Madhya Pradesh and others, argued that the petitioner was given sufficient opportunity and could apply for fresh registration. The petitioner stated they would not be prejudiced if given a chance to revoke the registration and resume business, subject to a cost imposition.
Key Issues
1. Whether the petitioner was afforded sufficient opportunity of hearing before the cancellation of their GST registration, as per Section 29 of the Central Goods and Services Tax Act, 2017 and Rule 22 of the Central Goods and Services Tax Rules, 2017? Petitioner's Argument: The petitioner argued that they were not given a sufficient opportunity of hearing. Had a proper hearing been provided, they would have explained the reasons for non-submission of GST returns. Revenue's Argument: The respondents, referring to Section 25, 29, and 30 of the CGST Act, 2017, and Rule 21(a) and (h), Rules 22 and 23 of the CGST Rules, 2017, contended that the petitioner was indeed given sufficient opportunity of hearing.
Sections Cited
Section 25, Section 29, Section 30, Rule 21, Rule 22, Rule 23
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Cause title — parties, addresses and appearances
ORDER Per: Justice Anand Pathak Present petition is preferred under Article 226 of the Constitution of India taking exception to the order dated 13/02/2023 (Annexure P/1) passed by Assistant Commissioner of Sales Tax Morena, whereby the registration of petitioner's firm, was rejected. 2 . Precisely stated, facts of the case are that the petitioner is local resident of Morena and owner and proprietor of a construction firm namely; M/s Gour Group. As alleged, due to some inadvertent mistake on part of accountant, the petitioner could not pay attention to his business and did not submit GST returns from the year 2022, resulting into cancellation of his registration vide order dated 13.02.2023. 3 . It is the grievance of the petitioner that sufficient opportunity of 1 WP-9752-20
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Reproduced from the public record of the Madhya Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.