Case Law Details
Vsv Info Private Limited Vs Assistant Commissioner St and Others (Andhra Pradesh High Court)
Andhra Pradesh High Court heard a case involving VSV Info Private Limited, which challenged the cancellation of its GST registration without being given an opportunity for a personal hearing. The petitioner, engaged in software publishing, consultancy, and supply, had obtained GST registration in Vijayawada in 2019. However, due to the impact of the Covid-19 pandemic and the loss of their accountant, the petitioner was unable to file the required GST returns from May 2019 to June 2022. In response, the authorities issued a show cause notice on 02.02.2023 for failing to file monthly GSTR-1 and GSTR-3B returns for six months, proposing to cancel the GST registration. The notice also suspended the GST registration immediately, preventing the petitioner from accessing the portal to submit returns.
The petitioner argued that the GST registration was cancelled without providing a chance for a personal hearing, violating the principles of natural justice. The petitioner further contended that the cancellation was retroactively dated to 30.06.2022, which was eight months earlier. The government defended the cancellation, citing Section 29(2) of the GST Act, 2017, which allows suspension and cancellation of registration due to non-compliance with return filing requirements. However, the court found that the authorities had acted in contravention of the law by not providing the petitioner with an opportunity to be heard before canceling the registration. The court emphasized that such decisions must adhere to procedural fairness. Therefore, the court set aside the cancellation order and directed the authorities to reconsider the petitioner’s representation for the restoration of the GST registration, ensuring compliance with the principles of natural justice.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
The petitioner is aggrieved by the order of cancellation of GST registration dated 25.02.2023 issued by the 1st respondent vide reference No.ZA37022304 1229R without granting an opportunity for personal hearing.
2. The petitioner is the business of software publishing, consultancy and supply of software. The petitioner applied and obtained GST registration at Auto Nagar, Vijayawada – 2 Circle vide registration No.37AAFCV4976Q1Z9.
3. It is submitted that the petitioner could not do any business during the Covid-19 pandemic and was submitting nil GST returns for the period May, 2019 till June, 2022. It is stated that, the Accountant of the petitioner discontinued his service with the petitioner, thus the petitioner was unable to file monthly GSTR-1 and 3-B returns.
4. The 1st respondent issued show cause notice dated 02.02.2023 proposing to cancel the GST registration as monthly returns were not filed for a period of six months. It is submitted that even before the passing of final order and even before the petitioner could submit his reply, the show cause notice indicated that the registration of the petitioner stood suspended with effect from 02.02.2023.
5. The learned counsel for the petitioner submits that on account of suspension of the GST registration with effect from the date of issuance of the show cause notice, the petitioner was unable to access the portal for submitting the returns.
6. The impugned order dated 25.02.2023 would indicate that no reply to the show cause notice was submitted. The effective date of cancellation of registration as 30.06.2022. The learned counsel for the petitioner submits that the effective date of cancellation is antedated by eight months.
7. The learned Government Pleader for Commercial Tax submits that there is no infirmity in the impugned order. As per Section 29(2) of GST Act, 2017, the non-compliance of the statutory requirement in filing of monthly GSTR-1 returns and 3-B returns would lead to suspension of the registration and the subsequent order of cancellation of registration.
8. Considering the submissions of the learned counsel appearing for the parties and Section 29(2) of the GST Act, 2017 does not confer blanket powers to the proper officer to cancel the registration without giving an opportunity of being heard.
9. The impugned order is certainly passed in contravention of Section 29(2) of the GST Act, 2017 to the extent of passing the same without giving of an opportunity of being heard.
10. Considering the orders passed by this Court in similarly placed matters the principles of natural justice have not been followed by the respondents before passing the impugned order. The impugned order dated 25.02.2023 is hereby set aside.
11. In our considered opinion, ends of Justice would be met if the writ petition is disposed off with a direction to the respondents to consider the reply/representation of the petitioner seeking restoration of the GST registration within a period of two weeks from the date of receipt of such reply/representation of the petitioner.
12. In the result, the writ petition is disposed off without costs. Pending miscellaneous petitions, if any, shall stands closed.
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