GST Registration Cancellation: HC should not exercise jurisdiction for failure to pursue alternate remedies

Nitya Enterprises Hathidah Vs State of Bihar through the Commissioner (Patna High Court)

Introduction: The case of Nitya Enterprises Hathidah vs. State of Bihar through the Commissioner before the Patna High Court revolves around the cancellation of registration under the Bihar Goods and Services Tax Act, 2017. The petitioner challenges the cancellation order citing delay in availing appellate remedies.

Detailed Analysis:

1. Cancellation of Registration: The petitioner contests the cancellation of registration through an order dated 14.03.2022. Despite an appellate remedy available, the petitioner filed an appeal after a significant delay, contravening the provisions of Section 107 of the Bihar GST Act.

2. Delay in Availing Remedies: Section 107 of the BGST Act allows for an appeal within three months, extendable by one month with a delay condonation application. However, the petitioner filed the appeal on 03.12.2023, approximately one year and five months after the order, without sufficient reasons for the delay.

3. Absence of Diligence: The court emphasizes that extraordinary jurisdiction under Article 226 should not be invoked when alternate remedies are available, and the petitioner fails to pursue them diligently within the prescribed time frame. The law favors diligence over indolence in such matters.

4. Failure to Utilize Amnesty Scheme: The petitioner also neglects to avail the opportunity provided by the government’s Amnesty Scheme, which allowed restoration of registration upon payment of dues within a specified period.

Conclusion: The Patna High Court dismisses the writ petition filed by Nitya Enterprises Hathidah against the cancellation of registration. The court underscores the importance of adhering to statutory timelines and diligently pursuing available remedies. The judgment highlights the significance of compliance and timely action in matters concerning tax regulations.

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FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT

The petitioner is aggrieved with the cancellation of registration by Annexure-1 order passed on 14.03.2022.

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. Here, the order impugned in the appeal was dated 14.03.2022. An appeal was to be filed on or before 13.06.2022 and if necessary with a delay condonation application within one month thereafter. The appeal is said to have been filed only on 03.12.2023, after about one year five months. 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. The law favours the diligent and not the indolent.

4. The petitioner does not have any case that the show-cause notice was not received by him, which is not produced herein. Further, the Government had come out with an Amnesty Scheme by Circular No. 3 of 2023, by which the registered dealers, whose registrations were cancelled were permitted to restore their registration on payment of all dues between 31.03.2023 to 31.08.2023. The petitioner did not avail of such remedy also.

5. The writ petition would stand dismissed.