Desk of CA. Praveen Sharma – 941 Series (CAPS)

Calcutta High Court in the case of Peul Enterprise

The Calcutta High Court dealt with a writ petition challenging an order passed by the Appellate Authority under Section 107 of the CGST Act, 2017, whereby the appeal of the petitioner against cancellation of GST registration was dismissed.

The petitioner’s GST registration had originally been cancelled on the ground that returns were not filed for a continuous period of six months. There were no allegations of fraud, suppression of facts, tax evasion, or involvement in any suspicious or illegal activities either in the show cause notice or in the cancellation order.

Before the Court, the petitioner submitted that he was willing to continue business operations and was ready to file all pending returns and discharge the entire outstanding liability including tax, interest, late fees, penalty, and other applicable charges.

The Court observed that cancellation was based solely on non-filing of returns and not on any fraudulent conduct. It further noted that refusal to restore registration could adversely affect the petitioner’s business and potentially lead to loss of revenue for the State.

Considering these facts, the Court granted one final opportunity. The order of cancellation was set aside subject to the condition that the petitioner files all pending returns and pays all dues within four weeks from the date of the order. Upon compliance, the registration is to be restored, and the jurisdictional officer is directed to activate the GST portal to enable compliance.

The Court clarified that if the petitioner fails to comply within the stipulated time, the cancellation would automatically revive. The writ petition was accordingly disposed of without any order as to costs.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS