GST Registration Cancellation Overturned: Court Orders Restoration Within One Week Despite Late Returns

HC allowed the appeal, directing restoration of appellant's GST registration certificate under both state and central acts within one week. The court found the cancellation orders and rejection of revocation application unreasonable and arbitrary due to lack of proper reasoning. Authorities had cancelled registration despite appellant filing returns and paying taxes, late fees, and interest. The court noted violations of natural justice principles and jurisdictional confusion between state and central authorities. Authorities were granted liberty to issue a fresh show cause notice for any late fee discrepancies, with requirement to provide a speaking order.

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Issues:
1. Challenge to order directing respondents to file affidavit-in-opposition and denial of interim relief for restoration of registration certificate under West Bengal Goods & Service Tax Act and Central Goods & Service Tax Act.
2. Cancellation of registration certificate by state and central authorities.
3. Rejection of application for revocation of cancellation.
4. Lack of reasons provided in orders leading to challenges of being unreasonable and arbitrary.
5. Jurisdictional issues regarding authorities passing orders.

Issue 1: Challenge to Order and Interim Relief
The appellant filed an intra court mandamus appeal against an order directing respondents to file affidavit-in-opposition and denying interim relief for restoring the registration certificate under the West Bengal Goods & Service Tax Act and Central Goods & Service Tax Act. The appeal was disposed of with consent of counsels.

Issue 2: Cancellation of Registration Certificate
The state authorities issued a show cause notice proposing cancellation of the appellant's registration certificate for not filing returns for six months. The appellant filed returns and paid taxes, late fees, and interest. However, the central authorities cancelled the registration without reference to a subsequent show cause notice, indicating a violation of natural justice principles.

Issue 3: Rejection of Application for Revocation
The appellant applied for revocation of the cancellation, but the state authorities rejected it citing non-payment of late fees and interest without providing reasons for disregarding the appellant's reply. This rejection was deemed unreasonable, arbitrary, and liable to be set aside.

Issue 4: Lack of Reasons in Orders
The orders of cancellation by state and central authorities, as well as the rejection of the application for revocation, were found to lack reasons, rendering them unsustainable. The absence of clear reasons in the orders led to challenges of being unreasonable and arbitrary.

Issue 5: Jurisdictional Concerns
There were discrepancies regarding whether the orders were passed by state or central authorities, leading to confusion. The lack of clarity in jurisdiction and the arbitrary exercise of authority by either entity were highlighted as violations of natural justice principles.

In conclusion, the High Court of Calcutta allowed the appeal and directed the restoration of the appellant's registration certificate under both Acts within a week. The authorities were granted liberty to issue a show cause notice if there are discrepancies in late fee remittances, with a requirement to provide a speaking order in accordance with the law. The court emphasized the importance of providing reasons in orders, ensuring compliance with natural justice principles, and avoiding arbitrary exercises of authority by state or central authorities.

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