Facts of the Case

The petitioner, Manoj Kumar Verma, challenged the Show Cause Notice dated 18.12.2020 and the subsequent Order dated 31.12.2020 cancelling his GST registration. The petitioner approached the Uttarakhand High Court seeking quashing of both the Show Cause Notice and the cancellation order along with restoration of his GST registration.

The petitioner also requested the Court to direct the tax authorities to revive his GST registration so that he could continue carrying on his business activities.

Issues Involved

  1. Whether the cancellation of the petitioner's GST registration deserved judicial interference.
  2. Whether denial of GST registration adversely affected the petitioner's right to carry on his occupation and earn his livelihood.
  3. Whether the petitioner should be granted an opportunity for reconsideration by the tax authorities despite the statutory limitation relating to appeals.

Petitioner's Arguments

  • The petitioner challenged the legality of the Show Cause Notice issued for cancellation of GST registration.
  • The petitioner contended that the cancellation order was liable to be quashed.
  • He sought restoration of his GST registration to enable him to continue his business activities.
  • The petitioner prayed that the authorities be directed to revive his GST registration in accordance with law.

Respondents' Arguments

The respondents defended the action taken under the GST law. The Court considered the statutory framework governing cancellation of registration and also took note of the legal position laid down in an earlier Division Bench judgment concerning delayed appeals and cancellation of GST registration.

Court Order / Findings

The Uttarakhand High Court referred to its earlier judgment in Special Appeal No. 123 of 2022, wherein it had observed that the statutory provisions governing limitation for filing appeals under the GST law are strict and provide only a limited period for condonation of delay. The Court further observed that cancellation of GST registration may deprive a person of earning his livelihood, particularly where the person is dependent upon GST registration for raising bills and receiving payments.

The Court reiterated that denial of GST registration, in appropriate cases, may affect the right to livelihood, which forms part of the right to life under Article 21 of the Constitution of India.

Considering that the petitioner was a labour contractor and that the departmental record reflected nil outstanding dues, the Court disposed of the writ petition by granting liberty to the petitioner to file an appropriate representation before the Superintendent of Central Tax, Range-IV, Uttarkashi within ten days.

The Court further directed the respondent authority to reconsider the petitioner's application sympathetically and pass an appropriate order within fifteen days from the date of production of the certified copy of the judgment.

Important Clarification

  • Cancellation of GST registration may have serious consequences on a taxpayer's ability to carry on business.
  • Courts may exercise writ jurisdiction where cancellation of GST registration directly impacts the taxpayer's livelihood.
  • Even where statutory appellate remedies become time-barred, constitutional remedies may be invoked in exceptional circumstances.
  • Authorities are expected to adopt a reasonable and compassionate approach where there are no outstanding government dues and restoration deserves reconsideration.
  • The judgment highlights the importance of balancing statutory compliance with the constitutional protection of the right to livelihood.

Section Involved

  • Section 29 of the Central Goods and Services Tax Act, 2017 – Cancellation of Registration.


Link to Download the Order https://www.mytaxexpert.co.in/uploads/1785391425_2305compressed.pdf

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