Case Law Details
Chamarajnagar Taluk MSPC Vs Office of The Commissioner of Central Tax (Karnataka High Court)
Karnataka High Court remanded matter for consideration of revocation of GST cancellation since non-filing of GST return within stipulated time period was due to bonafide reasons, unavoidable circumstances and sufficient cause.
Facts- The present petition is preferred by the petitioner against order of cancellation of GST registration. The petitioner submits that due to bonafide reasons, unavoidable circumstances and sufficient cause and on account of e-mail ID of the petitioner being inoperative and non-functional, the petitioner could not submit the GST returns for a continuous period of six months, as a result of which, GST registration of the petitioner was cancelled.
Conclusion- Held that its inability and omission to file its returns within the prescribed / stipulated period was due to bonafide reasons, unavoidable circumstances and sufficient cause. Under these circumstances, in the light of the specific assertion on the part of the petitioner that petitioner would pay the entire outstanding tax dues together with interest subject to availment of Input Tax Credit and in the peculiar / special facts and circumstances of the instant case, I deem it just and appropriate to exercise my jurisdiction under Article 226 of the Constitution of India and set aside the impugned Order-in-original at Annexure – D dated 13.12.2022 and remit the matter back to respondent No.2 for consideration of the claim of the petitioner for revocation of GST cancellation after providing sufficient and reasonable opportunity to the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, petitioner seeks the following reliefs:
“i) Issue a Writ of Certiorari or in the like nature of Certiorari impugned order-in-original bearing reference No.AA290522008223M dated 13.12.2022, passed by respondent No.2 vide-Annexure-D;
ii) Issue Writ of Certiorari or in the like nature of Certiorari setting aside the order-in-appeal bearing ref. No.MYS-ADC/JC(A)-84-85/2023-24-GST dated 27.12.2023 / 28.12.2023 passed by respondent No.3 vide-Annexure-F;
iii) Issue a writ of Mandamus or in the nature of Mandamus, directing the Respondent No.2 and / Respondent No.3 to permit the Petitioner to file their pending GST returns for the period in dispute and to permit the Petitioner to remit the applicable taxes, while also permitting the Petitioner to claim the benefit of Input Tax Credit (ITC) for the period that their registration stood revoked.
iv) Pass such other or further order as this Hon’ble Court may deem fit in the facts and circumstances of this Case, in the interest of justice and equity.”
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that due to bonafide reasons, unavoidable circumstances and sufficient cause and on account of e-mail ID of the petitioner being inoperative and non-functional, the petitioner could not submit the GST returns for a continuous period of six months, as a result of which, the respondents issued a Show Cause Notice dated 04.05.2022, which culminated in the impugned order at Annexure – D dated 13.12.2022 thereby canceling GST registration of the petitioner. Aggrieved by the said order of cancellation of GST registration, petitioner filed a statutory appeal under Section 107 of the CGST Act, 2017 before the Appellate Authority, which was dismissed as barred by limitation since the same was filed beyond the prescribed period of four months. In this context, learned counsel for the petitioner submits that the petitioner is ready to deposit pending tax amount along with interest subject to availment of Input Tax Credit and since the petitioner is a Society registered under the Karnataka Societies Registration Act and involved in supply of food supplements to Anganwadi Centers and schools, it is necessary that the impugned order passed by the original authority canceling registration of GST be set aside and matter remitted back to respondent No.2 for consideration of the request for revocation of GST cancellation of the petitioner by providing an opportunity in favour of the petitioner.
4. Per contra, learned counsel for the respondents would support the impugned order and submits that there is no merit in the petition and that the same is liable to be dismissed.
5. A perusal of the material on record will indicate that it is no doubt true that the appeal preferred by the petitioner before the Appellate Authority was dismissed as barred by limitation, in this context a perusal of the order of the Appellate Authority at Annexure – F dated 27.12.2023 will indicate that the merits of the claim of the petitioner for revocation of the GST cancellation has not been examined by the Appellate Authority, which has proceeded to summarily dismiss the appeal as barred by limitation. It is needless to state that if an appeal is dismissed as barred by limitation, it is no appeal in the eye of law and dismissal of the appeal as barred by limitation would not result in merger of the order of the original authority into the order of the Appellate Authority. In other words, if an appeal is dismissed as barred by limitation, the order of the original authority would still remain and would not merge with the order-in-appeal and order of the original authority would be capable of being challenged under Article 226 of the Constitution of India subject to all exceptions known in law.
6. Under these circumstances, merely because appeal preferred by the petitioner was dismissed by the Appellate Authority vide impugned order at Annexure – F dated 27.12.2023, it cannot be said that this Court is denuded of its power and jurisdiction to examine the claim of the petitioner under Article 226 of the Constitution of India or to examine the legality, validity and correctness of the order of the original authority under Article 226 of the Constitution of India.
7. The next point for consideration is whether any indulgence is to be shown to the petitioner in the facts and circumstances of the instant case so as to enable the petitioner to seek revocation of the GST cancellation in its favour. In this context, it is relevant to state that the petitioner is supplying food supplements to Anganwadi Centres and schools and is a society registered under the Karnataka Societies Registration Act. It is also pertinent to note that the petitioner has specifically contended that its inability and omission to file its returns within the prescribed / stipulated period was due to bonafide reasons, unavoidable circumstances and sufficient cause. Under these circumstances, in the light of the specific assertion on the part of the petitioner that petitioner would pay the entire outstanding tax dues together with interest subject to availment of Input Tax Credit and in the peculiar / special facts and circumstances of the instant case, I deem it just and appropriate to exercise my jurisdiction under Article 226 of the Constitution of India and set aside the impugned Order-in-original at Annexure – D dated 13.12.2022 and remit the matter back to respondent No.2 for consideration of the claim of the petitioner for revocation of GST cancellation after providing sufficient and reasonable opportunity to the petitioner.
8. In the result, I pass the following:
ORDER
(i) The petition is hereby allowed.
(ii) The impugned order at Annexure – D dated 13.12.2022 passed by respondent No.2 is hereby set aside.
(iii) Matter is remitted back to respondent No.2 for consideration of the claim of the petitioner for revocation of GST cancellation of the petitioner – Society.
(iv) Liberty is reserved in favour of the petitioner to file pleadings, documents, etc., to respondent No.2, who shall provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law.
(v) Petitioner undertakes to appear before respondent No.2 on 04.2024.
(vi) Immediately upon petitioner appears before respondent No.2 and filing pleadings, documents, etc., the respondent No.2, shall hear and pass appropriate orders on the claim of the petitioner within a period of three months from 01.04.2024.
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