2024 (11) TMI 1334 - HC - GST

GST registration cancellation orders set aside due to procedural lapses and improper consideration of petitioner's reply

M/s. Padiyar Krishi Sewa Kendra Thru Proprietor Kailash Padiyar Versus Union of India And Others

The HC set aside orders cancelling GST registration and dismissing appeal on limitation grounds. The petitioner's registration was cancelled for ... Cancellation of GST registration of petitioner due to non-filing of the GSTR 3B returns - dismissal of appeal on the ground of limitation - non-application of mind on the part of respondents - violation of principles of natural justice - HELD THAT:- On perusal of record of this case, this Court finds that for non-filing of GST returns, the petitioner was issued a Show Cause Notice dated 21.11.2019 for cancellation of registration as he has not filed returns for a continuous period of six months - On perusal of the said show cause notice, it is not clear that reply submitted by the petitioner has not been considered. Thus, the aforesaid show cause notice shows and impugned order are passed without application of mind on the part of respondents. The appeal filed by the petitioner against order dated 09.06.2022, has been dismissed by the Appellate Authority by the impugned order dated 29.05.2024 on the ground of limitation - In the impugned order dated 09.06.2022, it is observed that the petitioner is required to pay the following amount, however, the amount is mentioned as 'zero'. Therefore, there was no occasion to deposit the amount because the respondents did not mention the amount to be paid. The orders dated 09.06.2022 passed by the Adjudicating Authority and order dated 29.05.2024 passed by the Appellate Authority are hereby set aside - Consequently, the petition is allowed. Issues:Challenge against cancellation of GST registration and dismissal of appeal on the ground of limitation.Analysis:The petitioner challenged the cancellation of GST registration and the dismissal of the appeal based on limitation. The petitioner received a Show Cause Notice for non-filing of GSTR 3B returns, leading to the cancellation of registration. The petitioner argued that the appeal was dismissed without considering the merits of the case, solely on the grounds of limitation. The petitioner sought the setting aside of the dismissal order and restoration of GST registration for future business activities.The Court noted that the cancellation was based on the non-filing of GST returns for six consecutive months. However, it observed that the show cause notice and the impugned order were issued without proper consideration of the petitioner's reply, indicating a lack of application of mind on the part of the authorities. The Court found discrepancies in the process followed by the Adjudicating Authority and highlighted the need for a more thorough review of the case before canceling the registration.Regarding the order passed by the Adjudicating Authority, it was found that although the petitioner was asked to pay a certain amount, the actual amount was mentioned as 'zero.' This ambiguity raised questions about the necessity of depositing any sum, as the respondents failed to specify the payable amount. Consequently, the Court set aside the orders dated 09.06.2022 and 29.05.2024, thereby allowing the petition.The Court granted liberty to the respondents to issue a fresh Show Cause Notice to the petitioner if deemed necessary, ensuring compliance with the law. It was clarified that the petitioner could challenge any future orders through the appropriate legal channels. Additionally, any pending interlocutory applications were disposed of as part of the judgment.