Case Law Details
Rahul Kumar Vs Union of India through the Secretary (Patna High Court)
Introduction: In a recent case before the Patna High Court, the issue of GST registration cancellation due to non-filing of returns was contested by the petitioner, Mr. Rahul Kumar. However, the court upheld the cancellation order, citing procedural irregularities and the petitioner’s failure to avail of appellate remedies.
Detailed Analysis: The petitioner challenged the cancellation of registration by the order dated 14.01.2021, arguing that the show-cause notice issued on 29.12.2020 directed appearance on 24.12.2020, rendering the proceedings illegal due to lack of notice.
While acknowledging the illegality in the notice date, the court emphasized that the petitioner failed to avail of the appellate remedy within the stipulated time frame. Section 107 of the Bihar Goods and Services Tax Act allows an appeal to be filed within three months, extendable with delay condonation for a further period. The Supreme Court’s extension of limitation due to the pandemic situation further provided an opportunity for filing appeals until 30.06.2022.
However, the petitioner filed the appeal on 06.12.2022, well beyond the extended limitation period. The court noted the petitioner’s lack of diligence in availing alternate remedies and ruled against invoking Article 226 jurisdiction.
Moreover, the petitioner did not contest the non-receipt of the show-cause notice or raise the violation of natural justice principles in the appeal. The reason cited for cancellation was the petitioner’s failure to file returns for a continuous period of six months, which remained unchallenged.
Conclusion: The Patna High Court’s decision to dismiss the writ petition underscores the importance of procedural compliance and timely utilization of appellate remedies in GST matters. Despite the procedural irregularity in the notice, the petitioner’s failure to raise objections or avail of appellate avenues led to the confirmation of GST registration cancellation. This case serves as a reminder for taxpayers to promptly address legal issues and exhaust available remedies to safeguard their interests in tax proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The petitioner is aggrieved with the cancellation of registration by Annexure-3 order passed on 14.01.2021. The vehement contention of the learned counsel for the petitioner is that the show-cause notice for cancellation of registration dated 29.12.2020 directed appearance on 24.12.2020 and the order of cancellation of registration was passed on 14.01.2021. Learned counsel for the petitioner contends that the proceedings are fraught with illegality in so far as no notice having been issued.
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. We have to take into account the saving of limitation granted by the Hon’ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020, In Re: Cognizance For Extension of Limitation. Therein, due to the pandemic situation limitation was saved between 15.03.2020 till 28.02.2022. It was also directed that an appeal could be filed within ninety days from 01.03.2022. Here, the order impugned in the appeal was dated 14.01.2021. An appeal was to be filed on or before 30.06.2022 as permitted by the Hon’ble Supreme Court and if necessary with a delay condonation application within one month thereafter. The appeal is said to have been filed only on 06.12.2022, after about five months from the date on which even the 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.
4. True, there is an illegality in so far as the notice issued having shown a date prior to the date of the notice for hearing. The petitioner could have responded to the notice and asked for a further date which was not done by the petitioner. The petitioner does not have any case that the show-cause notice was not received by him. Further, it is very pertinent that the petitioner had not filed an appeal from the order of cancellation of registration in which he could very well have raised this ground of violation of principles of natural justice. As was noticed, the appeal ought to have been filed on or before 30.07.2022. The petitioner has not been diligent enough and at this distance of time almost three years after the cancellation of registration cannot seek a fresh show-cause notice to be issued. 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 any case that he had in fact filed a return in the continuous period of six months. A remand would be a useless formality.
5. The writ petition would stand dismissed.
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