List on 17.03.2023

The short issue, that falls for consideration in this appeal was whether the cancellation of the registration granted to the appellants under the provisions of the WBGST Act, 2017 was just and proper and whether the appellate authority was right in upholding the order of cancellation of the registration. The appeal and the writ petition are disposed of and the order passed by the appellate authority and the original authority are set aside and the original authority is directed to restore the appellants’ registration.

This is an application for pre-arrest bail. The application is rejected as premature.

The grievance of the petitioner before this Court is that before passing the final order, the petitioner should have been heard, in view of Rule 92 (3) of CGST Rules, 2017.

This Court is of the view that there is no liability to interest, the impugned order to the extent to which it levies interest under Section 50(3) of the CGST, on ITC, Education Cess and Higher Education Cess, is not in conformity with law and is set aside.

As the appellant had sought for availing the alternate remedy and has, in fact, availed it, we are not inclined to admit this writ appeal and hear the contentions of the appellant on merits. Learned Counsel for the appellant raises an apprehension that since the writ petition was dismissed, he would be prejudiced in the appeal before the statutory authority as it will be taken that his contentions were rejected by this Court.

No interest or late payment charges can be levied for the period technical glitches had prevented the petitioner from filing its returns. However, any delay on the part of the petitioner to file the returns after the technical glitches were resolved, would invite payment of interest and also late payment charges. The petitioner would be afforded the opportunity of hearing on the question of whether any interest or late payment charges are payable by it. In the event, that the respondents consider that there is any delay on the part of the petitioner after the technical glitches have been resolved, it would be open for the respondents to issue a show cause notice for the recovery of any amount of interest, or other charges payable by the petitioner, in accordance with law.

The second respondent – the Superintendent of Central Tax - is permitted to pass suitable orders for revocation of the cancellation of registration, if the petitioner files Returns for the relevant period for which returns have to be file

The petitioner has filed the present petition impugning an order whereby the petitioner’s application for cancellation of its GST registration, was rejected. The reason for seeking cancellation of the registration was disclosed as “Discontinuance of business/Closure of business”. Indisputably, the petitioner has a right to seek cancellation of the registration on the aforesaid ground. The respondents are directed to cancel the petitioner’s registration with effect from 31.07.2021, as requested by the petitioner.

It is directed that the cancellation of the petitioner’s registration will take effect from 11.01.2020. It is further clarified that this order will not preclude the respondents from initiating any proceedings for recovery of any tax, interest or penalty as may be otherwise due from the petitioner, in accordance with law.

This Court in these circumstances must opine that there is a complete lack of application of mind in canceling the petitioner’s registration and the petitioner has made out grounds that would justify interference. Hence, the petition is allowed, and the order dated 20.04.2022 [Annexure-A] is quashed on the condition that the petitioner files returns within a period of four [4] weeks from the date of receipt of a certified copy of this order. Failing which, the cancellation order shall stand revived.

By filling the present petition under Article 226 of the Constitution, challenge is addressed by the petitioner to two orders. The first is order is an order passed under section 129(2) of the Central Goods and Services Tax Act, 2017. The other challenge is addressed against order passed under section 130 of the Act. The petitioner has to face the adjudicatory proceedings under section 130 of the Act.