Facts of the Case

The petitioner, R S Cattle Feed Mills, had its GST registration (GSTIN 01AGGPC6801M1ZR) cancelled on 28.10.2019 for non-filing of more than six consecutive returns, following a show cause notice dated 18.10.2019 to which the petitioner claimed to have replied. The petitioner filed a statutory online appeal before the Deputy Commissioner (Appeals) II on 29.03.2022, which remained undecided. Separately, the petitioner had earlier filed WP(C) No. 2474/2022, disposed of by consent on 23.02.2023 with liberty to file a detailed representation; the State Tax Officer, by order dated 16.03.2023, held that due process had been followed (SCN duly served, no reply filed) and directed the petitioner to pursue the pending appellate remedy, while clarifying the department itself lacked power to revoke suo motu absent an Appellate Authority direction. The petitioner then filed the present second writ petition seeking outright quashment of the cancellation.

Issues Involved

  1. Whether the writ court should grant relief on merits regarding the cancellation of registration, given a statutory appeal was already pending before the Appellate Authority.
  2. What relief was appropriate to address the prolonged pendency (since March 2022) of the statutory appeal.

Petitioner's Arguments

  • The registration was cancelled without affording an opportunity of being heard, despite the petitioner having responded to the show cause notice.
  • The statutory appeal filed in March 2022 remained undecided for over a year, causing continuing prejudice.

Respondent's Arguments

  • Due process had been followed: a show cause notice was validly served (reference no. ZA011019002999K dated 18.10.2019), no reply was filed by the taxpayer, and the registration was accordingly cancelled; the office itself had no power to revoke the cancellation suo motu absent a direction from the Appellate Authority.

Court Order / Findings

  • The Court observed that the ease-of-doing-business rationale underlying the GST regime necessarily implies quickness of decision-making by authorities and functionaries at both original and appellate levels.
  • Given that the petitioner had already invoked the statutory appellate remedy, which remained pending before the Deputy Commissioner (Appeal) II, the Court declined to grant indulgence on the merits of the cancellation in the writ petition, but directed the appellate authority to hear and decide the pending appeal within the shortest possible time, preferably within three weeks from receipt of the order.
  • The appellate authority was directed to pass an appropriate order on merits after hearing the petitioner and provide a copy to the petitioner.

Important Clarification

Where a taxpayer's statutory appeal against GST registration cancellation has remained pending and undecided for an extended period, a writ court, rather than deciding the underlying cancellation dispute itself, will decline to entertain the writ on merits (since the statutory remedy is already invoked) but will use its supervisory jurisdiction to direct the appellate authority to decide the pending appeal within a strict, short timeframe — reflecting the ease-of-doing-business ethos the GST regime is meant to serve.

Sections Involved

  • Section 29(2), Central/Union Territory Goods and Services Tax Act, 2017 – governs cancellation of registration for non-filing of returns for a continuous period.
  • Statutory appeal under the GST Act (equivalent to Section 107) – the appellate remedy invoked by the petitioner before the Deputy Commissioner (Appeal) II.

Decision – In Favour of

The petition was disposed of with a direction for expeditious disposal of the pending appeal, without a decision on the merits of cancellation — a procedural outcome that is broadly favourable to the Assessee in securing a time-bound hearing, though the ultimate merits remain for the appellate authority.

Case Details

Court: High Court of Jammu & Kashmir and Ladakh at Jammu
Case No.: WP(C) No. 944/2023
Coram: Hon'ble the Chief Justice N. Kotiswar Singh and Hon'ble Mr. Justice Rahul Bharti
Date of Order: 17.04.2023

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