Md. Salim Ahmed v. Union of India and 3 Ors

ORDER Date : 03.02.2023 Heard Mr. R. S. Mishra, learned counsel for the petitioner. Also heard Mr. S. C. Keyal, learned standing counsel for the GST.

¶2This writ petition is filed impugning the order dated 08.03.2022 respondent No. 4, namely, the Superintendent, Central Goods and Service Tax, Karimganj, Assam whereby the GST registration of the petitioner was cancelled in terms of the provisions of Section 29 of the Central Goods and Services Tax Act, 2017.

¶3The petitioner is engaged in the business of trading of fish and fish feeds under the name and style "Md. Salim Ahmed" having its principle place of business at Kaliganj Bazar, Chargula, PWD Road, Karimganj, Assam. It is submitted that because of COVID-19 Pandemic, the business of the petitioner suffered severely and the petitioner sustained huge financial losses. It is submitted that owing to acute financial hardship of the petitioner, the petitioner had defaulted in complying with the provisions of the CGST Act, 2017 and, therefore, the statutory returns could not be filed on due dates. It is submitted that the petitioner was served with a show cause notice being Show Cause Notice bearing reference No. ZA1802220020765 dated 02.02.2022 whereby the petitioner was asked to furnish a reply to the said show cause notice within a period of seven working days from the date of receipt of the same. It is submitted that pursuant to the show cause notice, the GST registration of the petitioner was cancelled vide Order No. ZA1803220060066 dated 08.03.2022.

¶4It is submitted by the petitioner that subsequently, after improvement of COVID-19 Pandemic situation, the petitioner revived his business and filed his returns upto July, 2022. After filing of such returns, the petitioner attempted to file Page No.# 3/5 an application for revocation of the cancellation. However, since it was not filed within the prescribed period, the same could not be filed. An appeal under Section 107 against the cancellation of its GST registration also could not be filed because of lapse of the prescribed period. It is submitted by the petitioner that since the GST returns to the extent permitted by the portal has already been deposited, the cancellation of the GST registration is not justified as the same was on account of non-filing of GST returns due to the hardship faced by the petitioner because of COVID-19 Pandemic situations. The GST returns upto March, 2022 now having been filed, there is no necessity to disallow the revocation of the cancellation of GST registration in favour of the petitioner by the respondent authorities. The learned counsel for the petitioner submits that this action of the respondent authorities is punitive in nature and has the effect of putting the business of the petitioner to a complete halt as without the GST registration he is unable to continue with his business as it is his only source of his livelihood.

¶5The learned standing counsel has fairly submitted that there are orders passed by the other Co-ordinate Benches in respect of the cancellation of GST registration and, therefore, this writ petition can also be disposed of in terms of similar directions.

¶6The learned counsels for the parties have been heard and the pleadings on record have been duly perused. The orders passed by the Co-ordinate Bench of this Court in WP(C) No. 6232/2022 and WP(C) No. 6429/2022 have also been perused. In these two writ petitions, this Court had directed restoration of GST registration after deposit of all pending dues.

¶7Under Rule 23(1) of the GST Rules of 2017 it is provided that no application for revocation shall be filed unless such returns are furnished and any amount due as tax in terms of such returns has been paid along with any amount Page No.# 4/5 payable towards interest, penalty and late fee in respect of the said returns. The reasons for default on the part of the petitioner to submit its periodical returns as required under GST Act and the Rules, as pleaded in the present proceedings, are attributed to the financial losses suffered by the petitioner because of the COVID-19 Pandemic situation. It is the further case of the petitioner that against the order of cancellation of its GST registration, no appeal could be preferred before the Appellate Authority under Section 107 of the GST Act, 2017 because of lapse of the time limit prescribed.

¶8The purpose of limitation being prescribed in a statute is two fold, namely, to ensure compliance of the statutory provisions by the persons on whom the provisions of the statute are applicable and further to ensure that no third party rights which may have been created in the meantime are permitted to be non-suited/unsettled. Under the scheme of GST Act and Rules, the non-revocation of cancellation of GST registration is likely to prejudice the assessee alone. In cancellation of such GST registration for the reasons mentioned under the Section, it cannot be said that any third party rights are created against the assessee. No prejudice is caused to any other person, if the GST registration of the petitioner/assessee is revoked. No prejudice is caused to the revenue. Rather as discussed above, it will be in the interest of the revenue to permit the revocation of a cancellation of GST registration of an assessee like the petitioner so that it felicitates collection of revenue as mandated under the GST Regime.

¶9It is directed that the respondent No. 4, namely, the Superintendent, Central Goods and Service Tax, Karimganj, Assam will intimate the petitioner the total outstanding statutory dues standing in the name of the petitioner till the date on which his GST registration was cancelled. Upon such intimation, if any such outstanding statutory dues under GST is required to be paid the same shall be deposited by the petitioner without fail. Upon such deposit of statutory dues under Page No.# 5/5 the GST Regime by the petitioner, the respondent Authority will proceed to restore the GST registration of the petitioner.

¶10With this direction, the writ petition stands disposed of in terms of the above. No cost.

JUDGE Comparing Assistant

PageoNo.#o1/5 GAHC010245192022 ooooooo ooooooooooooooo ooooooooooooooooTHEoGAUHATIoHIGHoCOURTo (HIGHoCOURToOFoASSAM,oNAGALAND,oMIZORAMoANDoARUNACHALoPRADESH)o CaseoNo.o:oWP(C)/7938/2022o MD.oSALIMoAHMEDo S/O-oJALILoABDUL,o R/I-oKALIGANJoBAZAR,oCHARGULA,oPWDoROAD,oKARIMGANJ,oASSAM,o PIN-788720 VERSUSo UNIONoOFoINDIAoANDo3oORSo REPoBYoTHEoSECRETARYoTOoTHEoGOVT.oOFoINDIA,oDEPARTMENToOFo FINANCE 2:THEoPRINCIPALoCOMMISSIONER oCENTRALoGOODSoANDoSERVICEoTAX oGSToBHAWAN oKEDARoROAD oFANCYoBAZAR oGUWAHATI-781001 oASSAM 3:THEoASSISTANToCOMMISSIONER oCENTRALoGOODSoANDoSERVICEoTAXoKARIMGANJo oASSAM 4:THEoSUPERINTENDENT oCENTRALoGOODSoANDoSERVICEoTAXoKARIMGANJo oASSAo AdvocateoforotheoPetitionerooooo:oMR.oAoKoGUPTAo AdvocateoforotheoRespondento:oDY.S.G.I.oo oooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo Page No.# 2/5 BEFORE HONOURABLE MR. JUSTICE SOUMITRA SAIKIA