Case Law Details
Smt. Shailaja Chandrashekar Vs Additional Commissioner of Central Tax (Appelas) (Karnataka High Court)
An Appeal u/s 107 of CGST Act against cancellation of GST registration cannot be denied solely because remedy u/s 30 of CGST Act was not exercised by the assessee
The Hon’ble Karnataka High Court inM/s Shailaja Chandrashekar v. Additional Commissioner of Central Tax (Appeals), [Writ Petition No. 17778/ 2022 (T-RES) dated October 13, 2022] held that an Appeal under Section 107 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) against the cancellation of a GST registration cannot be disregarded just because the assessee did not avail the remedy under Section 30 of the CGST Act.
Facts:
M/s Shailaja Chandrashekar (“the Petitioner”) filed a writ petition in the Hon’ble High Court, alleging that the Respondents during a lockdown due to the COVID- 19 pandemic issued an Order dated April 13, 2020, revoking or cancelling the Petitioner’s GST registration. The Petitioner could not prefer an Appeal within prescribed period because of the ongoing COVID- 19 pandemic. Petitioner could only prefer an Appeal before the Appellate Authority on March 30, 2022 and the Appellate Authority vide its Order dated April 22, 2022 dismissed the same on the ground that the Appeal is not maintainable since, the only option left to the Petitioner was to approach the concern Officer (Respondent No. 2) for revocation of the cancellation and Restoration of the Registration under Section 30 of the CGST Act.
The Respondent submitted that the writ petition should be dismissed because the writ petition was preferred on September 2, 2022 and Respondent No. 3 vide letter dated September 6, 2022 informed the Petitioner that the application for revocation of the cancellation of registration cannot be considered
Issue:
Whether remedy of Appeal under Section 107 of the CGST Act can be availed even if remedy under Section 30 of the CGST Act is not exercised?
Held:
The Hon’ble Karnataka High Court in Writ Petition No. 17778/ 2022 (T-RES) dated October 13, 2022 held as under:
- Section 107 of the CGST Act indicates that a remedy of an Appeal before the Appellate Authority is available against the Order passed by the Respondent no 3 cancelling the GST Registration. Merely because the Petitioner has an option of seeking revocation of the cancellation under Section 30 of the CGST Act it cannot be said that independent of the said remedy of seeking revocation of cancellation, an Appeal would not be maintainable.
- The Hon’ble Court set aside the Order dated April 22, 2022 and directed the Respondent No. 3 to reconsider the Petitioner’s request for the revocation of the cancellation of registration in light of the observations made in the Order, without reference to the communication issued to the Petitioner by the Respondent on September 6, 2022.
- The Hon’ble Court also asked the Respondent to reconsider the claim of the Petitioner and pass appropriate Order and /or take appropriate decision in accordance with law within a period of two weeks from the date of receipt of copy of the Order.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, the petitioners have sought for the following reliefs:
“ (i) Issue a writ of certiorari or any other appropriate writ/order/direction quashing the Order-in-Appeal No.:MYS-SPP-ADC/Jc(A)-001 to 010-2022-23 GST dated 22.04.2022 passed by Respondent No.1. vide Annexure-F.
(ii) Issue a writ in the nature of mandamus or any other appropriate writ/order/direction to Respondent No.2 and / or Respondent No.3 to restore the GST Registration of the Petitioner;
(iii) Grant ad-interim relief as prayed for herein below;
(iv) Grant such other order or direction as deemed fit in the facts and circumstances of the cases in the interest of justice.”
2. Heard learned counsel for the petitioner and learned counsel for 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 documents produced by the petitioner, learned counsel for the petitioner submits that on 13.04.2020 when there was a lockdown on account of covid 19 pandemic, the respondents passed an order revoking/canceling the GST registration of the petitioner. Subsequently due to the covid 19 pandemic, the petitioner could not prefer an appeal within the prescribed period and on account of extension of time granted due to the covid 19 pandemic, the petitioner preferred an appeal before the respondent No.1-Appellate Authority on 30.03.2022. On 22.04.2022, respondent No.1-Appellate Authority dismissed the appeal on the ground that the appeal was not maintainable since the only option available to the petitioner was to approach the respondent No.2 for revocation of the cancellation and restoration of the registration.
The learned counsel also submits that the petitioner has paid the entire tax payable upto to the date of cancellation and for the subsequent period also certain amount has been deposited by the petitioner before the respondent No.1-Appellate Authority. Aggrieved by the impugned order dated 22.04.2022 passed by respondent No.1-Appellate Authority and refusal on the part of respondent No.2 to revoke cancellation of registration of GST in favour of the petitioner, the petitioner is before this Court by way of the present petition.
4. In support of his contention, the learned counsel for the petitioner places reliance on the following judgments:
3. UCHIT N SHETH FOR THE PETITIONER V/S MR PRIYANK LIDHA FOR THE RESPONDENT REPORTED IN 2022 (4) TMI 751 – GUJARAT HIGH COURT
5. In addition to reiterating the various contentions urged in the statement of objections, the learned counsel for the respondents submits that there is no merit in the petition and same is liable to be dismissed. It is also submitted that after the present petition was preferred on 02.09.2022 the respondent No.3 has issued communication letter dated 06.09.2022 informing the petitioner that application for revocation of the cancellation of registration cannot be considered.
6. Perusal of the material on record and Section 107 of the CGST Act, 2017 will indicate that as against an order passed by the respondent No.3 canceling the registration of GST, the petitioner has an remedy by way of appeal under Section 107 before the respondent No.1-Appellate Authority. In this context, it is relevant to state that merely because that the petitioner has an option of seeking revocation of the cancellation under Section 30 of the CGST Act, it cannot be said that independent of the said remedy of seeking revocation of cancellation, an appeal would not be maintainable and as such, the impugned order passed by the respondent No.1-Appellate Authority summarily dismissing the appeal on the ground that it is not maintainable in view of availability of the remedy of seeking revocation of the cancellation is clearly contrary to Section 107 and Section 30 of the CGST Act and same deserves to be set aside.
7. As rightly contended by the learned counsel for the petitioner, having regard to the material on record and specific assertion on the part of the petitioner that it was not possible for him to seek revocation of the cancellation order on account of the covid 19 pandemic and till disposal of the appeal by respondent No.1-Appellate Authority, the said explanation offered by the petitioner in not seeking revocation of the cancellation within a stipulated period of 30 days under Section 30 of the CGST Act is to be held as valid and proper and respondent No.2 is to be directed to reconsider the claim of the petitioner for revocation of the cancellation order in accordance with law subject to payment of outstanding due taxes by the petitioner in accordance with law.
8. In the result, I pass the following:
ORDER
i) Petition is hereby allowed.
ii) The impugned order dated 22.04.2022 at Annexure – F is hereby set aside.
iii) Respondent No.3 is directed to reconsider the request of the petitioner for revocation of the cancellation of registration bearing in mind the observation made in this order and decisions referred to supra and without reference to the communication dated 06.09.2022 issued by respondent No.3 to the petitioner since the same has come into existence during the pendency of the petition when the matter was before this Court.
iv) The respondent No.3 shall reconsider the claim of the petitioner and pass appropriate order /take appropriate decision in accordance with law within a period of two weeks from the date of receipt of copy of this order.
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