Facts of the Case

  1. The petitioner, M/s Sri Anjaneya Electrical and Civil Works, was a proprietorship concern engaged in executing electrical and civil works, including installation of electrical poles and transformers.
  2. Following enactment of the Central Goods and Services Tax Act, 2017 and related laws introducing the GST regime, the petitioner obtained GST registration through a registration certificate dated 3 April 2018.
  3. The order records the petitioner’s GST registration number as 36EOBPM8642K1ZH.
  4. On 14 February 2020, the fifth respondent issued a show cause notice asking the petitioner to explain why its GST registration should not be cancelled.
  5. The stated ground for proposed cancellation was that the petitioner had not filed GST returns for the last six months.
  6. The order records that the petitioner appeared to have submitted a reply on 25 February 2020.
  7. The fifth respondent declined to accept the petitioner’s explanation and cancelled the petitioner’s GST registration by order dated 8 April 2020.
  8. The petitioner challenged the cancellation order in appeal before the fourth respondent.
  9. By order-in-appeal dated 21 October 2022, the fourth respondent dismissed the appeal on the ground of limitation.
  10. The petitioner thereafter approached the Telangana High Court under Article 226 of the Constitution of India.
  11. The petitioner sought quashing of both:
  • the original cancellation order dated 8 April 2020; and
  • the appellate order dated 21 October 2022.
  1. During the hearing, counsel for the parties brought to the Court’s notice that writ petitions raising identical grievances had previously been remanded by the High Court to the primary authority for fresh decisions in accordance with law.

Issues Involved

The principal issues involved were:

  1. Whether the GST registration cancellation order dated 8 April 2020 should be sustained where the petitioner’s registration had been cancelled for non-filing of returns for six months.
  2. Whether the appellate order dated 21 October 2022 dismissing the petitioner’s appeal on limitation could survive in the circumstances of the case.
  3. Whether the petitioner was entitled to parity with similarly situated litigants whose identical grievances had been remanded to the primary authority for fresh consideration.
  4. Whether the principles applied in Nitya Construction v. Union of India and M/s. Chenna Krishnamacharyulu v. Additional Commissioner required similar relief in the petitioner’s case.
  5. Whether the matter should be remanded to the original authority for fresh adjudication in accordance with law after granting due opportunity of hearing.

Petitioner’s Arguments

The petitioner’s case, as reflected from the writ petition and the Court’s order, was substantially as follows:

  1. The original order dated 8 April 2020 cancelling GST registration was liable to be quashed.
  2. The appellate order dated 21 October 2022 rejecting the appeal was also liable to be set aside.
  3. The appeal had been rejected on limitation despite the petitioner’s challenge concerning revocation/cancellation of GST registration.
  4. The writ petition specifically asserted that the impugned appellate order was illegal, arbitrary, unjust and improper.
  5. The petitioner also relied upon the Supreme Court’s suo motu proceedings concerning limitation, referred to in the writ petition as Suo Motu W.P. (Civil) No. 3 of 2022, while challenging the rejection of the appeal.
  6. During the hearing, the Court was informed that identical grievances had already resulted in remand orders for fresh decisions by the primary authority.
  7. The petitioner therefore sought appropriate relief against the cancellation and appellate orders.

Respondents’ Arguments

The detailed independent submissions of each respondent are not extensively reproduced in the final order.

However, the order records the following:

  1. Counsel for the respondents were heard.
  2. During the course of hearing, learned counsel for the parties brought to the Court’s notice that writ petitions raising identical grievances had previously been remanded to the primary authority for fresh decisions in accordance with law.
  3. The Court thereafter examined the earlier decisions in Nitya Construction v. Union of India and M/s. Chenna Krishnamacharyulu v. Additional Commissioner.

Accordingly, the decisive basis of the order was the existence of earlier decisions on identical grievances and application of the principle of parity.

Court Order / Findings

The Telangana High Court recorded and directed as follows:

1. Earlier Decisions on Identical Grievance Considered

The Court noted that in writ petitions raising identical grievances, matters had been remanded to the primary authority for fresh decisions in accordance with law.

2. Nitya Construction v. Union of India Considered

The Court expressly perused its earlier decision in Nitya Construction v. Union of India, cited in the uploaded order as 2022 (7) TMI 186.

3. M/s. Chenna Krishnamacharyulu v. Additional Commissioner Considered

The Court also expressly perused M/s. Chenna Krishnamacharyulu v. Additional Commissioner, cited in the uploaded order as 2022 (7) TMI 82.

4. Principle of Parity Applied

Following the above decisions and applying the principle of parity, the Court granted corresponding relief to the petitioner.

5. Original GST Cancellation Order Set Aside

The order dated 8 April 2020 passed by the fifth respondent cancelling the petitioner’s GST registration was set aside.

6. Appellate Order Set Aside

The order dated 21 October 2022 passed by the fourth respondent was also set aside.

7. Matter Remanded to Original Authority

The matter was remanded to the fifth respondent for fresh consideration.

8. Fresh Order on GST Registration Cancellation Directed

The fifth respondent was directed to consider and pass a fresh order regarding cancellation of the petitioner’s GST registration in accordance with law.

9. Due Opportunity of Hearing Mandatory

The Court specifically directed that the petitioner be given due opportunity of hearing before the fresh decision.

10. Four-Week Time Limit

The fresh decision was directed to be taken within four weeks from the date of receipt of a copy of the High Court’s order.

11. Writ Petition Disposed Without Costs

The writ petition was disposed of with no order as to costs.

12. Pending Miscellaneous Petitions Dismissed

Consequentially, pending miscellaneous petitions, if any, were dismissed.

Important Clarification

This judgment requires careful reading on the nature of relief actually granted.

1. High Court Did Not Direct Automatic Restoration of GST Registration

The Court did not finally declare that the petitioner’s GST registration must automatically stand restored.

Instead, it set aside the cancellation order and appellate order and remanded the matter to the original authority for a fresh decision.

2. Fresh Adjudication Must Be in Accordance with Law

The original authority was required to reconsider the question of cancellation and pass a fresh order in accordance with law.

3. Opportunity of Hearing Is Expressly Protected

The Court expressly required that the petitioner be given due opportunity of hearing.

4. Relief Was Based on Earlier Identical Cases and Principle of Parity

The Court’s operative reasoning rested on:

  • earlier decisions concerning identical grievances;
  • Nitya Construction v. Union of India;
  • M/s. Chenna Krishnamacharyulu v. Additional Commissioner; and
  • the principle of parity.

5. Appellate Limitation Issue Was Not Separately Decided Through Detailed Statutory Interpretation

Although the appellate order had dismissed the appeal on limitation, the High Court did not undertake an elaborate independent interpretation of every statutory limitation provision in the operative reasoning. Instead, it followed the earlier decisions and remanded the matter on parity.

6. Supreme Court Suo Motu Limitation Proceedings Were Part of the Petitioner’s Challenge

The writ petition referred to Suo Motu W.P. (Civil) No. 3 of 2022 of the Supreme Court while attacking the appellate rejection. However, the Telangana High Court’s operative reasoning ultimately proceeded by following its own earlier decisions and applying parity.

Sections / Legal Provisions Involved

·         Article 226 of the Constitution of India

·         Central Goods and Services Tax Act, 2017

·         Section 29 of the CGST Act, 2017

·         Section 30 of the CGST Act, 2017

·         Section 107 of the CGST Act, 2017

·         Rule 21 of the CGST Rules, 2017

·         Rule 22 of the CGST Rules, 2017

·         Rule 23 of the CGST Rules, 2017

·         Section 151 of the Code of Civil Procedure, 1908

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783401714_1184compressed.pdf

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