2020 (9) TMI 499 - HC - GST

Court dismisses writ petition challenging GST registration cancellation, directs statutory appeal process.

M/s M.S. Retail Private Limited Versus The Union Of India, The Ministry Of Finance, The Assistant Commissioner Of Commercial Taxes, The Additional/Joint Commissioner Of Central Tax

M/s M.S. Retail Private Limited Versus The Union Of India, The Ministry Of Finance, The Assistant Commissioner Of Commercial Taxes, The Additional/Joint ... Issues:1. Challenge to the cancellation of registration under the Central Goods and Services Tax Act.2. Allegation of violation of principles of natural justice and error in jurisdiction by the respondents.3. Contention regarding the issuance of show cause notices and orders without adjudicating a prior show cause notice from the Commissioner of Central Tax.4. Argument against the rejection of the application for revocation of cancellation.5. Dispute over the maintainability of the writ petition after withdrawal of the challenge to the constitutional validity of the CGST Act provisions.Issue 1: Challenge to the cancellation of registration under the Central Goods and Services Tax Act:The petitioner, a private limited company engaged in trading, challenged the cancellation of its registration under the Central Goods and Services Tax Act. The petitioner contended that it regularly filed returns and paid tax liabilities on time. The cancellation was based on alleged violations, leading to a show cause notice and subsequent cancellation. The petitioner sought revocation, leading to a series of legal actions and orders.Issue 2: Allegation of violation of principles of natural justice and error in jurisdiction:The petitioner argued that the respondents' actions lacked natural justice principles and were in error regarding jurisdiction. The petitioner highlighted that the cancellation was based on alleged circular trading violations without addressing a prior show cause notice from the Commissioner of Central Tax. The rejection of the revocation application was deemed erroneous and against natural justice principles.Issue 3: Contention regarding show cause notices and orders without adjudicating a prior notice:The petitioner raised concerns about the issuance of show cause notices and orders without adjudicating a prior notice from the Commissioner of Central Tax regarding alleged violations. The petitioner argued that the cancellation should not proceed without addressing the pending adjudication.Issue 4: Argument against rejection of revocation application:The rejection of the application for revocation of cancellation was challenged by the petitioner. The petitioner contended that the rejection was erroneous, lacked natural justice principles, and was based on alleged violations without addressing current compliance.Issue 5: Dispute over the maintainability of the writ petition:There was a dispute over the maintainability of the writ petition after the petitioner withdrew the challenge to the constitutional validity of the CGST Act provisions. The respondents argued that the appeal mechanism under Section 107 of the CGST Act should be pursued instead of the writ petition.The judgment dismissed the writ petition, stating that the petitioner could appeal under Section 107 of the Central Goods and Services Tax Act within thirty days. The court clarified that no opinion was expressed on the case's merits, leaving the decision to the appropriate authority upon appeal. The court noted the petitioner's initial challenge to CGST Act provisions, which was withdrawn, and emphasized the importance of utilizing the statutory appeal process for such disputes.