SANJAY KUMAR V. THE PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX AND CENTRAL EXCISE

WPC/5444/2023

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Sanjay Kumar, the proprietor of M/s Project Equipment and Construction Company, filed a writ petition challenging the cancellation of his firm's GST registration due to non-payment of interest on delayed tax payments. The registration was initially cancelled for failure to furnish returns for six months. Although the petitioner sought revocation of this cancellation, the application was not filed within the statutory period due to the proximity of a related court decision. The court, referencing its earlier decisions and the principles of natural justice, allowed the petitioner to file for revocation, emphasizing the importance of adjudication before imposing financial penalties.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 725909 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 06-03-2024
• Assessment Year: misc
• Other Referred Cases: M/s. Mahadeo Construction Company, W.P. (T) No. 2773 of 2023
• Laws Referred To: Goods and Services Tax Act, 2017
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AMIT KUMAR
• Assessee Lawyers: NITIN PASARI
• Keywords: GST Registration Cancellation; Interest payment; Natural Justice; Revocation of cancellation
• Section: 148; 30; 45; 39

Judgement Text

" IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P(T) No. 5444 of 2023 Sanjay Kumar, son of Shri Nand Kishore Prasad, aged about 38 years, resident of Basant Vihar Colony, Near Dhangi More, Koyla Nagar, BCCL Township, Kalakusuma, Dhanbad PO-BCCL Township, PS-Saraidhela, Town & District-Dhanbad, Pin-826005 (Jharkhand), Proprietor of M/s Project Equipment And Construction Company, a Proprietorship concern, having its office at Basant Vihar Colony, PO-BCCL Township, PS- Saraidhela, Town & District-Dhanbad, Pin-826005 (Jharkhand) ...… Petitioner Versus 1. The Principal Commissioner, Central Goods and Service Tax and Central Excise, having its office at Central Revenue Building, 5-A, Mahatma Gandhi Road, Main Road, PO & PS-Chutia, District-Ranchi- 834001(Jharkhand) 2. The Superintendent, Central Goods and Service Tax & Central Excise, Range-Saraidhela, Dhanbad having its Office at 3rd Floor, North Division, Dhanbad, H.E. School Road, Bhistipara, PO & PS-Hirapur, District- Dhanbad (Jharkhand) …. ... Respondents CORAM: HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE NAVNEET KUMAR For the Petitioner : Mr. Nitin Kumar Pasari, Advocate For the Respondents : Mr. Amit Kumar, Sr. S.C. (GST) --------- 6th March 2024 Per, Shree Chandrashekhar, A.C.J. The petitioner is aggrieved by the cancellation of registration for non-payment of interest. He seeks to avail the option under section 30 of the GST Act for revocation of the cancellation of registration. 2. By way of the present writ application, the petitioner prays for the following reliefs: (a) For issuance of an appropriate writ, order or direction, directing upon the Respondents to show cause as to how and under what circumstances, the petitioner could be forced to make payment of interest, for delayed payment of tax liability through cash for different months, without there being any adjudication of the same and without taking into consideration the orders passed by this Hon’ble Court; (b) Consequent upon showing cause, if any, and on being satisfied, that the actions of the Respondents are directly in conflict with the judgment rendered by this Hon’ble Court in the matter of M/s. Mahadeo Construction Company, as also, the Order passed by this Hon’ble Court in W.P. (T) No. 2773 of 2023, the Respondents be directed to revoke the cancellation of registration of the Petitioner, to enable him to file its returns and make due payment 2 W.P(T) No.5444 of 2023 of tax liability, if any. (c) For issuance of an appropriate writ, order or direction, directing upon the Respondents to initiate proper adjudication proceedings for calculation of interest payable, if any. (d) For issuance of any other appropriate writ(s)/ order(s)/ direction(s) as Your Lordships may deem just and proper in the facts and circumstances of the case for imparting substantial justice to the Petitioner.” 3. The petitioner in the capacity of the proprietor of M/s Project Equipment and Construction Company has approached this Court with the aforementioned prayers. The petitioner pleads that his proprietary Firm is duly registered under Goods and Services Tax Act, 2017 having GSTN No.20APHPK4064J1Z2 but the said registration was cancelled by an order dated 30th August 2022 on the ground that the Firm had failed to furnish the returns for a continuous period of six months. Against the order of cancellation dated 30th August 2022, the petitioner approached this Court in W.P(T) No.2773 of 2023 which was disposed of by an order dated 26th June 2023 with liberty to the petitioner to approach the respondent-authority for revocation of the cancellation of registration, as per Notification dated 31st March 2023. 4. The Notification dated 31st March 2023 which was issued by the Directorate of Revenue, Ministry of Finance, Government of India provided as under: “GSR. 246(E)-In exercise of the powers conferred by section 148 of the Central Goods and Services Tax 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Government, on the recommendations of Council, hereby notifies that the registered person, whose registration has been cancelled under clause (b) or (e) of sub-section (2) of section 29 of the said Act on or before the 31st day of December, 2022, and who has led to apply for revocation of cancellation of such registration within the time period specified in section 30 of the said Act as the class of registered persons who shall follow the following special procedure in respect of revocation of cancellation of such registration, namely:- a) the registered person may apply for revocation of cancellation of such registration upto the 30th day of June, 2023; b) the application for revocation shall be filed only after furnishing the returns due upto the effective date of cancellation of registration and after payment of any amount due as tax, in terms of such returns, along with any amount payable towards interest, penalty and late fee in respect of the such returns; c) no further extension of time period for filing application for revocation of cancellation of registration shall be available in such cases. Explanation: For the purposes of this notification, the person who has failed to apply for revocation of cancellation of registration within the time period specified in section 30 of the said Act 3 W.P(T) No.5444 of 2023 includes a person whose appeal against the order of cancellation of registration or the order rejecting application for revocation of cancellation of registration under section 107 of the said Act has been rejected on the ground of failure to adhere to the time limit specified under sub-section (1) of section 30 of the said Act.” 5. The petitioner has pleaded that on account of paucity of time he could not avail of the benefit under the Notification dated 31st March 2023 inasmuch as the last date for making the application for revocation of the cancellation of registration was 30th June 2023 and W.P(T) No.2773 of 2023 was disposed of on 26th June 2023. In the aforementioned circumstance, the petitioner has approached this Court. Mr. Nitin Kumar Pasari, the learned counsel for the petitioner submits that without any adjudication the petitioner is forced to make payment of interest to the tune of Rs.6,19,258.85/- on account of delayed payment of tax liability through cash for different months. According to the learned counsel for the petitioner, the procedure adopted by the respondent-authority is contrary to the provisions under the GST Act and the demand for payment of interest has been made in breach of natural justice. Per contra, Mr. Amit Kumar, the learned counsel for the GST/Income Tax Department submits that the periods of limitation for filing an application under section 30 or an appeal to challenge the order of cancellation of registration have already lapsed and, therefore, this Court may not grant any indulgence in the matter. 6. Section 39 of the GST Act provides that every registered person other than an input service distributor or a non-resident taxable person shall for every calendar month or part thereof furnish a return of inward and outward supply of goods and service. There are other requirements/ stipulations under section 39 which every registered person/Firm is required to comply. Section 45 provides a window to the registered person/Firm for restoration of the registration by allowing/furnishing of a final return within three months from the date of the cancellation or from the date of the order of cancellation whichever is later. Under section 30, any registered person whose registration is cancelled may apply for revocation of cancellation of registration in the prescribed manner. 7. The primary object behind the GST Act is levy and collection of tax on intra State supply of goods or services and the matters connected therewith or incidental thereto. Now the cancellation of registration shall 4 W.P(T) No.5444 of 2023 ensue serious civil consequences for the petitioner and his entire business shall come to a standstill. The provisions under sections 30, 45, 46, 47 etc. are intended at providing opportunity to the defaulter Firm so as the Firm continues its business. Therefore, a liberal approach is required to be taken in the matters like the present one. Moreover, the opportunity granted to the petitioner by this Court in the proceeding of W.P(T) No.2773 of 2023 can be reaffirmed in the present proceeding notwithstanding the period prescribed under section 30 of the GST Act having been lapsed. 8. Having thus examined the materials on record, we are of the opinion that a permission to the petitioner to file an application under section 30 of GST Act can be granted subject to the petitioner making payment of Rs.6,19,258.85 and other statutory penalty/fine for moving the application under section 30 of the GST Act. The payment of Rs. 6,19,258.85 on account of interest shall be without prejudice to the rights of the petitioner and the same shall remain open to challenge by the petitioner in a separate proceeding laid by the petitioner, if so advised, within 30 days. 9. Having regard to the peculiar facts and circumstances in the case, the present writ petition succeeds to the extent that the petitioner may file an application under section 30 of the GST Act within a period of 30 days and the period of limitation shall be counted from the date of this order. 10. W.P(T) No.5444 of 2023 is allowed to the aforesaid extent. (Shree Chandrashekhar, A.C.J.) (Navneet Kumar, J.) sudhir "