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of <h1>HC upholds GST registration cancellation under Section 29(2) for non-filing and non-payment of returns</h1> <h3>M/s National Rural and Mountain Tribal Development Association Versus The Union of India through the Commissioner, Central Goods and Services, Excise, Central Revenue Building (Annexe) Birchand Patel Path Patna, The Commissioner (Appeals) Customs, Central GST and Central Excise Patna, The Superintendent, CGST and CX, Phulwarisharif Range</h3> M/s National Rural and Mountain Tribal Development Association Versus The Union of India through the Commissioner, Central Goods and Services, Excise, ... 1. ISSUES PRESENTED and CONSIDERED Whether the cancellation of GST registration under Section 29(2)(c) of the CGST/BGST Act for non-filing of returns is valid where the petitioner received a show cause notice and submitted a reply but failed to file pending returns thereafter. Whether the appellate authority erred in dismissing the appeal against cancellation of registration on the ground of limitation. Whether the petitioner was denied opportunity of hearing or natural justice in the cancellation proceedings. Whether the petitioner's reliance on prior coordinate bench judgments setting aside cancellation orders in similar cases is applicable to the present facts. Whether the writ jurisdiction of the High Court can be invoked to interfere with the statutory cancellation and limitation-based dismissal of appeal. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of Cancellation of GST Registration under Section 29(2)(c) for Non-Filing of Returns Relevant Legal Framework and Precedents: Section 29(2)(c) of the CGST/BGST Act permits cancellation of GST registration where the registered person fails to file returns for a continuous period of six months. The proviso to sub-section (2) mandates issuance of a show cause notice and opportunity of hearing before cancellation. Court's Interpretation and Reasoning: The Court observed that the petitioner was duly served with a show cause notice dated 27.11.2019, to which the petitioner submitted a reply on 06.12.2019 explaining reasons for non-filing returns, partly due to lack of communication at office level. Despite this, the petitioner failed to file the pending returns for the relevant period. Key Evidence and Findings: The record shows the petitioner did not file returns for June 2018, July 2018, and September 2019, and did not pay the admitted tax dues prior to the cancellation order dated 03.07.2020. The petitioner's submission that returns were filed continuously was not accepted in light of the official records and counter affidavit. Application of Law to Facts: The Court found that the cancellation order was passed after affording the petitioner the opportunity of hearing as required under the proviso to Section 29(2). The failure to file returns despite notice constituted a valid ground for cancellation. Treatment of Competing Arguments: The petitioner argued reliance on judgments where cancellation was set aside due to lack of reasons or denial of hearing. The Court distinguished those cases on facts, noting that the impugned order contained reasons and hearing was granted. Conclusions: The cancellation of registration under Section 29(2)(c) was lawful and valid. No illegality was found in the cancellation order. Issue 2: Dismissal of Appeal on Ground of Limitation Relevant Legal Framework and Precedents: Section 107(1) and 107(4) of the CGST Act prescribe limitation periods for filing appeals against cancellation orders. The appellate authority's power to condone delay is circumscribed by statutory limits. Court's Interpretation and Reasoning: The appeal was filed nearly four years after the cancellation order. The appellate authority dismissed the appeal as barred by limitation, relying on binding Supreme Court precedent that statutory authorities cannot extend limitation beyond prescribed limits. Key Evidence and Findings: The petitioner did not contest awareness of the cancellation order nor offered any justification for the delay in filing appeal. The petitioner also failed to avail the amnesty scheme allowing restoration of registration between 31.03.2023 and 31.08.2023. Application of Law to Facts: The statutory limitation period was exceeded, and no valid grounds for condonation of delay were established. The appellate authority acted within its jurisdiction in dismissing the appeal. Treatment of Competing Arguments: The petitioner's contention that the appeal should be heard on merits was rejected due to statutory limitation constraints and absence of sufficient cause for delay. Conclusions: The dismissal of the appeal on limitation grounds was legally sound and justified. Issue 3: Alleged Denial of Opportunity of Hearing and Natural Justice Relevant Legal Framework and Precedents: Principles of natural justice require issuance of show cause notice and opportunity to be heard before cancellation of registration under Section 29(2) of the CGST/BGST Act. Court's Interpretation and Reasoning: The petitioner received the show cause notice and submitted a reply. The Court found no pleading or evidence indicating denial of opportunity to be heard. Key Evidence and Findings: The record confirms the petitioner's participation in the proceedings and submission of reply to the show cause notice. Application of Law to Facts: The statutory requirement of hearing was complied with; hence, no violation of natural justice occurred. Treatment of Competing Arguments: The petitioner's reliance on judgments where hearing was denied was distinguished on factual basis. Conclusions: No denial of opportunity of hearing or breach of natural justice was established. Issue 4: Applicability of Prior Coordinate Bench Judgments Relevant Legal Framework and Precedents: Prior coordinate bench decisions are persuasive but must be applied in light of facts and circumstances of each case. Court's Interpretation and Reasoning: The Court examined the judgments cited by the petitioner. In one case, cancellation orders lacked reasons; in another, show cause notice was not served or hearing denied. The present case differed on these material facts. Key Evidence and Findings: The impugned cancellation order contained reasons and the petitioner had opportunity to respond. Application of Law to Facts: The cited precedents were not applicable due to factual distinctions. Treatment of Competing Arguments: The petitioner's attempt to rely on these judgments was rejected as inapposite. Conclusions: Prior coordinate bench judgments did not warrant interference with the impugned orders. Issue 5: Writ Jurisdiction to Interfere with Statutory Cancellation and Limitation-Based Dismissal Relevant Legal Framework and Precedents: Writ jurisdiction is discretionary and not to be exercised to reappraise facts or substitute statutory remedies unless there is patent illegality or violation of fundamental rights. Court's Interpretation and Reasoning: The Court noted the petitioner's failure to avail statutory remedies within prescribed periods and absence of any illegality or denial of natural justice in the cancellation and appellate orders. Key Evidence and Findings: No exceptional circumstances or legal infirmities were demonstrated to justify writ interference. Application of Law to Facts: The Court declined to exercise writ jurisdiction to overturn valid cancellation and limitation-based dismissal of appeal. Treatment of Competing Arguments: The petitioner's plea for writ relief was rejected as lacking merit. Conclusions: The writ petition was dismissed for want of merit.
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