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High Court dismissed the petition filed against order of cancellation of GST Registration in the light of alternate provisions available with petitioner to file appeal against that order under section 107 of CGST Act.

Facts of Case

Aggrieved by the action of respondent in issuing show cause notice and subsequently canceling the registration of the petitioner under CGST Act and thereafter refusing to revoke the cancellation of registration, the petitioner has preferred this writ petition.

It is the contention of the petitioner that it has been regularly filing its monthly returns disclosing the trading transactions and also paying the GST tax liability within the due dates.

On the ground that the petitioner had violated certain provisions of the CGST Act and the Rules, a show cause notice dated 18.03.2020 in Form GST-REG 17 read with Rule 22(1) of the CGST Rules was issued to the petitioner by respondent no.3. The notice directed the petitioner to appear before respondent no.3 on 23.03.2020.

It is stated that due to COVID situation, the petitioner was unaware of the notice and there was a complete lock down of the business from 22.03.2020. Consequently, the petitioner could not appear before the authorities as stipulated in the notice. The authorities passed an order for cancellation of the registration of the petitioner with effect from 06.06.2020.

On realizing that its registration was cancelled, the petitioner submitted a request to respondent no.3 on 09.06.2020 to revoke the order of cancellation. As there was no response from the authorities, the petitioner preferred W.P.No.8167/2020 before this Court. The said writ petition was disposed of granting liberty to the petitioner to file necessary applications seeking revocation of cancellation of the registration and respondent no.3- Assistant Commissioner of Commercial Taxes, Bengaluru was directed to consider the same and pass appropriate orders.

Pursuant to the order passed in W.P.No.8167/2020, respondent no.4, who is the Officer with competent jurisdiction, issued a notice under Section 30 read with Section 29, Rules 21(b) and 23 of the CGST Act and the KGST Act and the Rules, 2017 to the petitioner asking him to show cause in respect of cancellation of its registration and a personal hearing was also afforded to the petitioner.

The petitioner submitted a reply on 06.07.2020 justifying its actions and prayed for revocation of the order of cancellation of registration and for restoration of the registration certificate. After hearing the petitioner, respondent no.4 by an order dated 10.07.2020 rejected the application for revocation of cancellation of registration. Subsequently, another communication dated 21.07.2020 has been issued to the petitioner intimating about the rejection of its application for revocation of cancellation.

Aggrieved by the issuance of show cause notice dated 18.03.2020, the order of cancellation of registration with effect from 06.06.2020, issuance of show cause notice dated 03.07.2020 by the authorities pursuant to the order of this Court in W.P.No.8167/2020 and the order of rejection of the application for revocation of cancellation dated 10.07.2020 and the communication dated 21.07.2020, the petitioner has challenged the said orders in the present writ petition. Further, the petitioner has also prayed for holding the provisions of Sections 29 and 30 of the CGST Act read with Rules 21, 22 and 23 of the CGST Rules as unconstitutional.

Held by High Court

In the course of the proceedings, the learned counsel for the petitioner submitted that he is not pressing the prayer (f) sought in the writ petition i.e. the prayer seeking to hold certain provisions of the CGST Act and the Rules there under as unconstitutional. 

It is not in dispute that the show cause notices, the order of cancellation and the order rejecting the application for revocation of cancellation are passed by proper officer. The show cause notice dated 18.03.2020 and the order of cancellation of registration dated 06.06.2020 have already been challenged before this Court in W.P.No.8167/2020 and cannot be challenged in the present writ petition. Pursuant to the order passed in W.P.No.8167/2020, respondent no.4 has issued the notice dated 03.07.2020 to the petitioner. There is no jurisdictional error in the said notice. The petitioner has made his representation on 06.07.2020 and has been given a personal hearing by respondent no.4 and thereafter, he has passed the order dated 10.07.2020. Thus, the said order is a speaking order and it records the reasons for rejecting the application of the petitioner for revocation of cancellation of registration. The intimation to the petitioner dated 21.07.2020 is pursuant to the order dated 10.07.2020 and it has to be construed as an intimation of the decision taken on 10.07.2020 by respondent no.4, though the reason assigned in the said intimation and the manner in which the same is styled may be erroneous. Even otherwise, the order dated 10.07.2020 is a reasoned order and the same cannot be held as without jurisdiction and in violation of any principles of natural justice. If the petitioner is aggrieved by the said order, it ought to have filed an appeal under Section 107 of the CGST Act. The petitioner cannot challenge the same by way of a writ petition.

However, it is noticed that the petitioner has filed the writ petition because it initially challenged certain provisions of the CGST Act and the CGST Rules which could not have been done by way of an appeal. However, for the reasons best known to the petitioner, it has given up the said prayer and has confined its arguments to erroneous exercise of jurisdiction by the respondents which this Court finds untenable for the aforementioned reasons. However, the Court is of the opinion that the petitioner cannot be bereft of its right of appeal as contemplated under the CGST Act. 

The writ petition is hereby dismissed. The petitioner is at liberty to prefer an appeal as contemplated under Section 107 of the Central Goods and Services Tax Act, 2017, if it so desires, within thirty days from today.

It is made clear that no opinion has been expressed upon the merits of the case. If the petitioner prefers an appeal, it is for the appropriate authority to take a decision.


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Author:

TaxReply


Sep 16, 2020

Comments


The order passed by the high court is a reasonable one based on the premise of alternative remedy. In the cases of various acts having inhouse redressal mechanism like income tax, central excise, wakf acts etc being technical in nature have got their own judicial review, appeal and second appeals. So it appears the advocate who filed writ petition in high court is not an advocate practcing on taxation side.
Such petitions always fail, with a single techical reply by the departmental representative.
The high court and supreme court never table in such cases where facts are disputed. Neither in such cases where alternative remedy is available. Incase the alternative remedy is temporarily unavailable because of vaccant forum then courts do intervene
By: Advocate Ferdous A Mohammed | Dt: Sep 16, 2020


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