Facts of the Case

The petitioner, Organization for Liberation of Rural Daliths, was granted GST Registration on 23.01.2019. Subsequently, the department issued a Show Cause Notice dated 30.11.2021 proposing cancellation of the GST registration on the ground that the petitioner had failed to furnish GST returns continuously for six months.

The petitioner submitted its reply on 09.12.2021. However, the Proper Officer cancelled the GST registration by order dated 20.01.2022 under the provisions of the CGST Act.

Aggrieved by the cancellation order, the petitioner preferred a statutory appeal before the Additional Commissioner (Appeals). The appellate authority dismissed the appeal on 21.10.2022, holding that it was barred by limitation.

Challenging both the cancellation order and the appellate order, the petitioner approached the Telangana High Court by filing the present writ petition under Article 226 of the Constitution of India.

 

Issues Involved

  1. Whether the GST registration could be cancelled for non-filing of GST returns without proper reconsideration of the taxpayer's explanation.
  2. Whether dismissal of the statutory appeal solely on the ground of limitation would deprive the petitioner of substantive justice.
  3. Whether the cancellation order and appellate order deserved to be set aside in view of earlier judgments of the Telangana High Court.
  4. Whether the matter should be remanded to the Proper Officer for fresh adjudication.

 

Petitioner’s Arguments

  • The petitioner contended that both the cancellation order and the appellate order were arbitrary, illegal and violative of the principles of natural justice.
  • It was argued that the authorities failed to properly consider the explanation submitted in response to the Show Cause Notice.
  • The petitioner submitted that denial of restoration of registration merely on the ground of limitation defeated the object of GST law and adversely affected its business.
  • The petitioner prayed that both the cancellation order and the appellate order be quashed and the matter be reconsidered on merits.

 

Respondent’s Arguments

  • The GST Department defended the cancellation of registration on the ground that the petitioner had continuously failed to furnish GST returns for six months.
  • The department also relied upon the appellate authority's finding that the statutory appeal was filed beyond the prescribed period of limitation and was therefore not maintainable.

 

Court Order / Findings

The Telangana High Court allowed the writ petition and observed that the controversy was no longer res integra, as identical issues had already been decided by the Court in several earlier judgments.

The Court relied upon its earlier decision in:

  • M/s. Chenna Krishnama Charyulu Karampudi vs Additional Commissioner (Appeals-I), W.P. No. 27071 of 2022, decided on 27.06.2022

Following the principle of judicial consistency, the High Court:

  • Set aside the cancellation order dated 20.01.2022.
  • Set aside the appellate order dated 21.10.2022.
  • Remanded the matter to the Proper Officer (Respondent No.2) for fresh consideration.
  • Directed the authority to provide an opportunity of hearing to the petitioner.
  • Clarified that during the fresh proceedings, the petitioner would be at liberty to file the pending GST returns in accordance with the statutory provisions.
  • Disposed of the writ petition without any order as to costs.

 

Important Clarification

The judgment reiterates that where GST registration has been cancelled for non-filing of returns and the appeal has been rejected merely on limitation, the High Court may exercise its writ jurisdiction to ensure substantial justice.

The Court emphasized that restoration of GST registration should be considered after granting an effective opportunity of hearing and allowing the taxpayer to regularize pending statutory compliances wherever permissible under law.

The decision also reinforces the principle that similar cases should receive similar treatment to maintain judicial consistency.

 

Sections Involved

  • Article 226 of the Constitution of India
  • Section 29 of the Central Goods and Services Tax Act, 2017 – Cancellation of Registration
  • Section 107 of the Central Goods and Services Tax Act, 2017 – Appeals to Appellate Authority
  • Relevant provisions of the CGST Rules relating to cancellation and revocation of GST registration.

 

Link to Download the Order https://www.mytaxexpert.co.in/uploads/1782894412_68.pdf

 

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