GST Registration cancellation- Failure to avail amnesty Scheme: Patna HC Quashes Writ

Bharti Enterprises Vs Union of India (Patna High Court)

GST Registration cancellation- Failure to avail amnesty Scheme: Patna HC Quashes Writ

In a recent ruling, the Patna High Court has dismissed the writ petition filed by Bharti Enterprises challenging the cancellation of their GST registration. The court’s decision underscores the importance of adhering to procedural timelines and availing of available remedies.

Background

The petitioner, Bharti Enterprises, challenged the cancellation of their GST registration through an order dated April 13, 2022. The cancellation was based on the non-filing of returns over a continuous six-month period. The petitioner’s appeal was filed significantly late, on December 16, 2023, well beyond the allowed period for both filing and delay condonation.

Key Points of the Judgment

1. Delay in Filing Appeal: The Patna High Court noted that under Section 107 of the Bihar Goods and Services Tax Act, 2017, an appeal must be filed within three months from the date of the order. Additionally, a delay condonation application must be filed within a further month if necessary. The petitioner’s appeal was filed over one year and six months past the deadline, leading the court to dismiss the appeal on grounds of procedural delay.
2. Amnesty Scheme: The court highlighted that an Amnesty Scheme had been introduced by the government, allowing registered dealers to restore their GST registration by paying all dues between March 31, 2023, and August 31, 2023. Bharti Enterprises did not take advantage of this scheme, which could have potentially resolved their registration issues.
3. Lack of Diligence: The court emphasized that the writ petition was not a substitute for available remedies, particularly when there are delays and a lack of diligence in pursuing those remedies. The petitioner failed to show that the show-cause notice was not received or that returns were filed during the period in question.

Conclusion

The Patna High Court’s decision reinforces that legal relief is not available to those who fail to act diligently within prescribed timelines and do not utilize available remedies. The dismissal of Bharti Enterprises’ petition highlights the importance of timely action and adherence to legal procedures in tax-related matters.

FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT

The petitioner is aggrieved with the cancellation of registration by Annexure-P/3 series order passed on 13.04.2022.

2. Admittedly, there is an appellate remedy which the petitioner availed with gross delay.

3. Section 107 of the Bihar Goods and Services Tax Act, 2017 (“BGST Act” hereafter) permits an appeal to be filed within three months and also apply for delay condonation with satisfactory reasons within a further period of one month. Here, the order impugned in the appeal was dated 13.04.2022. An appeal was to be filed on or before 30.07.2022 and if necessary with a delay condonation application within one month thereafter. The appeal is said to have been filed only on 16.12.2023, after about one years and six months from the date on which even the extended limitation period expired. In the above circumstances, we find no reason to invoke the extraordinary jurisdiction under Article 226, especially since it is not a measure to be employed where there are alternate remedies available and the assessee has not been diligent in availing such alternate remedies within the stipulated time. The law favours the diligent and not the indolent.

4. Further, the Government had come out with an Amnesty Scheme by Circular No. 3 of 2023, by which the registered dealers, whose registrations were cancelled were permitted to restore their registration on payment of all dues between 31.03.2023 to 31.08.2023. The petitioner did not avail of such remedy also.

5. The petitioner does not have any case that the show-cause notice was not received by him. Further, it is also pertinent that the reason stated in the show-cause notice for cancellation of registration is that the petitioner has not filed returns for a continuous period of six months. The petitioner does not have a case that he had in fact filed a return in the continuous period of six months.

6. The writ petition would stand dismissed.