GST registration cancellation quashed after medical emergency caused missed hearing and appeal rejection

The Bombay HC allowed a petition challenging cancellation of GST registration where the petitioner's statutory appeal was rejected due to time limitation after missing hearing due to medical emergency. The court held that GST provisions cannot be interpreted to deny constitutional rights under Articles 19(1)(g) and 21, emphasizing that the right to trade and livelihood cannot be curtailed contrary to constitutional guarantees. Considering the petitioner's unique circumstances during pandemic and health barriers, the court exercised jurisdiction under Article 226, quashing orders suspending and cancelling GST registration passed by tax authorities, allowing the petitioner to revive registration.

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Issues involved:
Challenge to cancellation of GST registration, Appeal rejection on grounds of limitation, Invocation of Article 226 for protection of fundamental rights.

Challenge to cancellation of GST registration:
The petitioner, a fabrication business firm, sought relief under Article 226 to quash the cancellation of its GST registration due to failure to file returns amid financial difficulties and health issues. The State Tax Officer suspended the registration, issued a show cause notice, and eventually cancelled the registration. The petitioner's subsequent application for revocation was rejected, leading to an appeal that was dismissed on the basis of being time-barred under section 107 of the MGST Act, 2017.

Appeal rejection on grounds of limitation:
The Deputy Commissioner/State Tax (Appeal) rejected the petitioner's appeal challenging the cancellation of registration citing limitation issues under section 107 of the MGST Act, 2017. The appellate authority lacked the power to condone delays exceeding 30 days. The petitioner's livelihood and business operations were severely impacted by the cancellation, leading to a plea for judicial intervention under Article 226 to safeguard fundamental rights guaranteed under the Constitution.

Invocation of Article 226 for protection of fundamental rights:
The High Court acknowledged the petitioner's unique circumstances, including pandemic-related financial losses and health barriers, emphasizing the constitutional right to carry on trade and commerce. Reference was made to the Supreme Court's stance on the jurisdiction of constitutional courts under Article 226, highlighting the need to balance legislative intent with the enforcement of fundamental rights. The Court held that denying the petitioner the opportunity to revive registration would not only harm the individual but also impede revenue generation and the objectives of the GST regime. Consequently, the Court exercised its jurisdiction under Article 226, allowing the petitioner to continue business operations upon meeting specified conditions.

This detailed analysis of the judgment showcases the legal intricacies involved in the challenge to the cancellation of GST registration, the appeal rejection based on limitation grounds, and the invocation of Article 226 to protect fundamental rights in the context of trade and commerce.

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