GST Update

Desk of CA. Praveen Sharma – 934 Series (CAPS) 

Bombay High Court in the Case of Kishore Nichani

The Bombay High Court recently gave important relief in a GST registration cancellation matter.

The petitioner’s GST registration was cancelled because returns were not filed for more than six months. He approached the Court requesting restoration of his registration and permission to file pending returns after paying all taxes, interest and late fees.

The petitioner explained that he had allowed another company to run a restaurant and bar from his property. Due to serious health issues, he could not properly manage GST compliance. A show cause notice was issued and his registration was cancelled retrospectively. Although the cancellation was once revoked after payment of dues, it was again cancelled without proper opportunity of hearing.

Later, the petitioner cleared all pending tax, interest and penalty amounts. The department also confirmed that no government dues were outstanding. However, his application for restoration was not acted upon, forcing him to approach the Court.

The High Court observed that GST registration cannot be cancelled without giving the taxpayer a fair opportunity to be heard. The Court also noted that once all dues are paid, keeping the registration cancelled serves no purpose and only harms the taxpayer’s business.

Accordingly, the Court allowed the petition and directed the authorities to restore the GST registration. No costs were imposed.

This judgment highlights the importance of natural justice and fairness in GST proceedings.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS