Judicial Intervention Restores GST Registration Proceedings, Mandates Fair Hearing and Opportunity to Present Bonafide Reasons

HC allowed petition partially, setting aside registration cancellation under CGST Act. The court directed restoration of proceedings, granting petitioner another opportunity to demonstrate bonafide reasons for non-filing returns and non-appearance. Third respondent must reconsider the case, ensuring principles of natural justice are followed, with petitioner required to appear on specified date.

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Issues involved:
The cancellation of registration under Section 29[3] of the Central Goods and Services Tax Act, 2017 due to failure to file returns, violation of principles of natural justice, inability to avail the opportunity of hearing for bonafide reasons, rejection of appeal on the ground of limitation.

Cancellation of Registration:
The petitioner's registration was cancelled by the impugned order dated 19.04.2022 under Section 29[3] of the CGST Act due to the failure to file returns. The petitioner contended that the cancellation was in violation of the principles of natural justice as they were unable to avail the opportunity of hearing extended for bonafide reasons. The third respondent recorded that the petitioner had filed a response on 17.04.2022 but had not responded to the Show Cause Notice dated 05.04.2022. The Court observed that if the petitioner can demonstrate bonafides, they should be given another opportunity of hearing to establish the same.

Appeal Rejection:
The petitioner preferred a first appeal stating that they could not appear for the personal hearing due to suffering from a lung disease and being advised bed rest, which affected their ability to file monthly returns. However, the appeal was rejected on the ground of limitation. The Court emphasized that a pedantic approach should not be taken and that the petitioner should be given a chance to demonstrate bonafides. The petitioner's reasons for non-appearance could be bonafide, and they should be granted another opportunity to be heard.

Court's Decision:
The Court allowed the petition in part, setting aside the cancellation order dated 19.04.2022 and restoring the proceedings to the third respondent for reconsideration in light of the Court's observations. The petitioner was directed to appear before the third respondent on 19.04.2023 without further notice. The Court emphasized the importance of giving the petitioner a fair opportunity to present their case and establish the bonafides of their reasons for non-appearance.

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