Contractor's GST Registration Cancelled for Non-Filing of GSTR3B Returns; Must Deposit 10% Tax Under Section 107(6)(b)

The HC dismissed a writ petition challenging GST registration cancellation and tax demand of Rs.4,94,632. The petitioner, a registered contractor who failed to file GSTR3B returns, agreed to deposit 10% of the tax amount within three weeks and file an appeal under Section 107(6)(b) of CGST Act. The court directed compliance with this proposal and submission before Appellate Authorities within the specified timeframe. The petition was dismissed without costs, emphasizing the importance of adhering to tax regulations and following proper statutory procedures when contesting tax demands.

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Issues:
1. Quashing of impugned notice and restoration of GST registration.
2. Failure to file GSTR3B returns and discharge tax liabilities.
3. Opportunity to explain reasons before tax demand.
4. Deposit of 10% of total tax amount and filing appeal.

Analysis:
1. The petitioner filed a Writ Petition seeking to quash a notice issued by the first respondent and to restore the petitioner's GST registration. The notice demanded a total sum of Rs.4,94,632 for State Goods and Service Tax and Central Goods and Service Tax. The petitioner, a registered contractor, had an agreement with a Thermal Power Station for various services but failed to file GSTR3B returns and discharge tax liabilities, leading to the notice. The petitioner's representation was not considered, prompting the Writ Petition.

2. The petitioner, through legal counsel, proposed to deposit 10% of the total tax amount within three weeks and file an appeal under Section 107(6)(b) of the Central Goods and Services Tax Act. The court directed the petitioner to comply with the deposit and make submissions before the Appellate Authorities within the specified time frame. Consequently, the writ petition was dismissed without costs, and related miscellaneous petitions were closed.

3. The court's decision was based on the petitioner's failure to fulfill tax obligations, leading to the issuance of the notice. Despite the petitioner's attempt to rectify the situation by proposing a partial payment and appeal, the court upheld the requirement for compliance with tax regulations and procedures. The dismissal of the writ petition signifies the importance of adhering to tax laws and fulfilling obligations promptly to avoid legal consequences.

4. The judgment highlights the legal process involved in challenging tax demands and the significance of following statutory provisions for appeals and payments. By emphasizing the need for timely compliance with tax laws, the court's decision underscores the importance of maintaining financial responsibilities and engaging in due process when addressing tax-related issues to ensure fair and lawful outcomes.

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