M. G. Exim Vs Assistant Commissioner (Circle) (ST) (Madras High Court)
Cancellation of GST registration amounted to a ‘Capital Punishment’ for traders, orders easier rules and SMS alerts in regional languages
Conclusion: Cancellation of registration certainly, amounted to a capital punishment so for as the traders, therefore, the GST department had to think of the consequences and relax the rules and also find the modalities of conveying the show cause notice by way of SMS and also in the regional languages. This court expect the department of GST to take appropriate action by amending the relevant provisions considering the consequences on traders.
Held: Assessee-contractor, did contract works for the Government and its agencies and was enrolled under the Central Goods and Service Tax Act, 2017. The GST registration was cancelled due to non- filing of returns for a period of six months. Assessee argued that, due to health issues, assessee relied on his accountant to file returns, but later discovered they were not filed on time. The appeal under Section 107 of the GST Act was not accepted due to the limitation period. Assessee argued that cancelling his GST registration harmed his livelihood and sought to have the order quashed. The respondent’s counsel argued that assessee had ample opportunity to respond before his GST registration was canceled. A show cause notice was issued which assessee ignored. The cancellation order was issued as the appeal was not filed within the limitation period. On appeal. It was held that Central Goods and Services Act, 2017, aimed to levy and collect tax on intra-state supplies and was not intended to restrict entrepreneurs’ rights. Denying assessee a GST registration would hinder their ability to raise bills, affecting employment opportunities and ultimately violating their right to livelihood under Article 21 of the Constitution. government contractor, and many small-scale entrepreneurs are often uneducated and unfamiliar with email and technology. Despite providing email IDs during registration, most traders do not manage them and are unaware of the consequences of late returns. The department should issue notices in regional languages, via SMS, and registered post to ensure effective communication and avoid rendering notices a mere formality. The court stated that the government’s goal was to promote trade, not to restrict it. The current practice of canceling registration acts as a “capital punishment” for small-scale entrepreneurs, halting their business, affecting salaries, and damaging long-term progress. The GST department should relax rules, issue notices via SMS, and in regional languages. The court expects the GST department to amend provisions to consider these consequences.
