Facts of the Case

  1. The petitioner, M/s Hanuman Agro Products, approached the High Court under Articles 226 and 227 of the Constitution of India.
  2. The petitioner’s GST registration had been cancelled by order dated 12 November 2021 on account of non-filing of returns.
  3. The petitioner sought quashing of:
    • the order for cancellation of registration dated 12 November 2021; and
    • the endorsement/communication dated 17 October 2022 issued by the respondent.
  4. The petitioner also sought a direction permitting submission of returns by revoking the cancellation order and consideration of the monthly returns already filed for the relevant earlier period along with the returns proposed to be filed subsequently.
  5. The petitioner further sought consideration of its application/representation dated 24 September 2022 for permitting filing of returns by revoking the cancellation of registration.
  6. According to the petitioner, it could not take the necessary steps for seeking revocation within the prescribed period because of the prevailing COVID-19 pandemic and non-receipt of payments from its purchasers, who were stated to be primarily Government agencies.
  7. The petitioner asserted that its failure to seek revocation within the prescribed period was attributable to bona fide reasons, unavoidable circumstances and sufficient cause.
  8. The petitioner stated that it was subsequently ready and willing to pay tax by filing returns, but the returns were not accepted because the portal was closed.
  9. Consequently, the petitioner invoked the writ jurisdiction of the High Court.

Issues Involved

The principal issues involved were:

  1. Whether the petitioner’s delayed request for revocation of cancellation of GST registration deserved reconsideration despite expiry of the prescribed period.
  2. Whether the circumstances pleaded by the petitioner, including the COVID-19 pandemic and non-receipt of payments from purchasers primarily comprising Government agencies, constituted bona fide reasons, unavoidable circumstances and sufficient cause.
  3. Whether the impugned communication/endorsement dated 17 October 2022 rejecting or not granting the petitioner’s request for revocation warranted interference under the writ jurisdiction of the High Court.
  4. Whether, in the peculiar facts and circumstances of the case, the respondent should be directed to reconsider revocation of cancellation without reference to the period of limitation.

Petitioner’s Arguments

The petitioner contended that:

  1. Its GST registration was cancelled on 12 November 2021 due to non-filing of returns.
  2. It could not seek revocation of cancellation within the prescribed period because of circumstances arising from the prevailing COVID-19 pandemic.
  3. The petitioner had also not received payments from its purchasers, who were primarily Government agencies, which contributed to its inability to take timely steps.
  4. The omission to seek revocation within the prescribed period was due to bona fide reasons, unavoidable circumstances and sufficient cause.
  5. The petitioner was subsequently ready and willing to pay the tax by filing returns.
  6. However, the returns could not be accepted because the portal had been closed.
  7. In view of these circumstances, the petitioner sought judicial intervention for reconsideration of its request for revocation of cancellation.

Respondent’s Arguments

The learned Additional Government Advocate appearing for the respondent opposed the writ petition and submitted that there was no merit in the petition.

Court Order / Findings

The Karnataka High Court made the following material findings and directions:

  1. The Court noted that the petitioner’s GST registration had been cancelled on 12 November 2021.
  2. The Court examined the petitioner’s representation dated 24 September 2022 seeking revocation of cancellation.
  3. The Court found that the representation clearly indicated that the petitioner had made out sufficient cause for seeking revocation.
  4. The Court further found that the petitioner’s inability and omission to seek revocation of cancellation within the prescribed period arose from bona fide reasons, unavoidable circumstances and sufficient cause.
  5. In these circumstances, the Court considered it appropriate to adopt a justice-oriented approach.
  6. The impugned communication/endorsement dated 17 October 2022 was quashed.
  7. The respondent was directed to reconsider the petitioner’s claim for revocation of cancellation of GST registration without reference to the period of limitation.
  8. The reconsideration was directed to be undertaken in accordance with law and as expeditiously as possible.
  9. The writ petition was accordingly allowed.

Important Clarification

The High Court expressly clarified that the order was passed in the peculiar and special facts and circumstances of the particular case.

Most importantly, the Court specifically stated that the order shall not be treated as a precedent for any purpose whatsoever.

Accordingly, the ruling should not be understood as laying down a general proposition that limitation for revocation of cancellation of GST registration must be ignored in every case. The relief was granted because the Court found sufficient cause, bona fide reasons and unavoidable circumstances in the specific factual setting placed before it.

Sections / Legal Provisions Involved

·         Articles 226 and 227 of the Constitution of India
The writ petition was filed invoking the constitutional writ and supervisory jurisdiction of the High Court.

·         Section 29 of the Central Goods and Services Tax Act, 2017 / corresponding State GST provisions
Relevant to cancellation of GST registration.

·         Section 30 of the Central Goods and Services Tax Act, 2017 / corresponding State GST provisions
Relevant to revocation of cancellation of registration.

·         Rule 23 of the Central Goods and Services Tax Rules, 2017 / corresponding State GST Rules
Relevant to the procedure governing revocation of cancellation of registration.

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783400531_1181compressed.pdf

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