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Case Law Details

Case Name : Dinesh Kumar S/o Kishan Lal Vs Commissioner, Central Goods And Service Tax (Rajasthan High Court at Jodhpur)
Appeal Number : D.B. Civil Writ Petition No. 904/2024
Date of Judgement/Order : 01/03/2024
Related Assessment Year :

Dinesh Kumar S/o Kishan Lal Vs Commissioner, Central Goods And Service Tax (Rajasthan High Court at Jodhpur)

In a significant legal development, the Rajasthan High Court at Jodhpur has issued a stay order regarding the cancellation of GST registration in the case of Dinesh Kumar S/o Kishan Lal vs Commissioner, Central Goods And Service Tax. The court’s decision, rendered in Civil Writ Petition No. 904/2024, dated 01.03.2024, holds profound implications for the petitioner and the broader legal landscape concerning GST regulations.

The core issue revolves around the cancellation of the petitioner’s GST registration certificate due to non-compliance with the filing of GST returns, as mandated by law. The Assistant Commissioner Circle Sanchore, District Jalore, had passed the order dated 24.02.2023, leading to the cancellation.

However, the High Court, in its wisdom, stayed the cancellation order, recognizing the petitioner’s right to appeal. The court noted that depriving the petitioner of this remedy would render them effectively without recourse, particularly considering the impact on their livelihood.

This decision underscores the fundamental right to engage in trade and commerce, as enshrined in the Constitution. The court’s stance aligns with previous judgments, such as Poonamchand Saran v. Union of India and Marudhar Medical Store Vs. Assistant Commissioner & Ors., emphasizing the importance of ensuring access to legal remedies, especially concerning livelihood-related matters.

On the contrary, the respondents argued against the court’s intervention, citing legislative intent and precedent. They referred to cases like Malik Khan v. Chief Commissioner, GST and Central Excise & Anr., where the court emphasized the importance of adhering to statutory appeal timelines.

The court, however, highlighted exceptional circumstances where a writ petition could be entertained, such as breaches of fundamental rights, violations of natural justice, excess of jurisdiction, or challenges to the vires of statutes or delegated legislation. Given the unique circumstances of the case and pending considerations on the validity of Section 107 of the Central Goods and Services Tax Act, 2017, the court admitted the writ petition for further deliberation.

As the matter progresses, the court ordered a provisional stay on the cancellation order, allowing the petitioner to upload GST details, albeit subject to late fee penalties as per Section 47 of the Act.

In conclusion, the Rajasthan High Court’s decision to stay the cancellation of GST registration in the case of Dinesh Kumar S/o Kishan Lal signifies a crucial legal precedent. It reaffirms the judiciary’s role in safeguarding constitutional rights and ensuring access to justice, particularly in matters affecting individuals’ livelihoods. This development sets a significant milestone in the ongoing discourse surrounding GST regulations and administrative procedures, emphasizing the need for a balanced approach that upholds both statutory compliance and fundamental rights.

The matter was filed and argued by Pushkar Taimni, Advocate for the Petitioner and Kudeep Vaishnav for the Respondent Department. 

FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT

1. Heard learned counsel for the parties.

2. Pushkar Taimni, learned counsel appearing on behalf of the petitioner submits that the core question arising in the present petition is that by impugned order dated 24.02.2023 (Annex.3), the GST registration certificate of the petitioner has been cancelled because of not filing of GST returns as stipulated in law.

2.1 Mr. Taimni further submits that though there is a statutory appeal under Section 107 of the Central Goods and Services Tax, 2017 (for short ‘the Act of 2017), but the same remedy is also not applicable to the present petitioner because the timeline of 30 days, which is prescribed in the remedy, is now not available to the present petitioner.

2.2 Mr. Taimni also submits that the petitioner has a constitutional right to freedom of trade and commerce, which is being jeopardized because the petitioner is not having any remedy whatsoever to upload the GST details and continue to earn his livelihood.

2.3 In support of his submissions, learned counsel for the petitioner has relied upon the decision rendered by this Hon’ble Court in Poonamchand Saran v. Union of India : D.B. Civil Writ Petition No.14521/2022 and other connected matters on 29.09.2022, the relevant portion whereof is reproduced hereunder:

“It cannot be denied that the petitioners herein would not be able to continue with their business in absence of GST registration and thus, would be deprived of their livelihood which amounts to violation of right to life and liberty as enshrined in Article 21 of the Constitution of India.

In this background, the order dated 09.09.2022 passed in the case of Poonamchand Saran (Writ Petition No.14521/2022) is set aside. Both the petitioners are given liberty to file appeal against the cancellation of their GST registration to the competent authority within ten days from today. Upon such appeals being filed, the same shall be considered and decided on all aspects in accordance with law excluding the bar of limitation in preferring the appeal by the petitioners.

With the above observations and directions, the writ petitions are disposed of.”

2.4 Learned counsel has also relied upon the decision rendered by this Hon’ble Court in Marudhar Medical Store Vs. Assistant Commissioner & Ors. : D.B. Civil Writ Petition No.16472/2023 on 01.12.2023, the operative portion whereof is reproduced hereunder:

“Having heard learned counsel for the parties and taking into consideration the judgment passed by the Co-ordinate Bench of this Court in Prakash Purohit’s case (supra), we are of the view that the writ petition filed by the petitioner deserves to be allowed as the petitioner has sufficiently explained the reasons for filing the appeal with delay.

Hence, the instant writ petition is allowed and the impugned order dated 18.09.2023 is set aside. The petitioner is at liberty to file an appeal against the cancellation of GST registration before the competent authority within ten days from today.

If any such appeal is filed within the stipulated time, the competent authority shall consider and decide the same on merits in accordance with law while treating the said appeal within limitation.

Stay petition is disposed of.”

3. On the other hand, Mr. Kuldeep Vaishnav, learned counsel for the respondents submits that this Hon’ble Court may have a wide power, but that does not mean that they issue a writ, which may be inconsistent with the legislative intent.

3.1 Mr. Kuldeep Vaishnav, learned counsel for the respondents has relied upon the decision rendered by this Hon’ble Court in Malik Khan v. Chief Commissioner, GST and Central Excise & Anr. : D.B. Civil Writ Petition No.2 785/2023 on 03.05.2023, the relevant portion of which reads as follows:

“(11) Heard learned counsel for the parties.

(12) It is an admitted position that against the impugned order, the petitioner has not filed statutory appeal under Section 107 of the Act of 2017. Since the limitation of filing appeal has already expired, the petitioner now cannot prefer appeal against the impugned order.

(13) Now, the question is whether this Court, in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India, can entertain writ petition challenging the impugned order on the ground that limitation period for filing statutory appeal has already expired ?

(14) The facts, which are not in dispute, are that the impugned order was passed on 16.2.2022 and per Section 107 of the Act of 2017, limitation provided for challenging the impugned order by way of appeal is 30 days and that limitation period could be extended by the appellate authority for a further period of one month subject to the satisfaction of the appellate authority that the person aggrieved was prevented by sufficient causes from presenting the appeal within a period of three months. In the present case, the petitioner has not filed appeal before the appellate authority within the prescribed limitation and has directly filed this writ petition before this Court on 2.2023 i.e. almost after eight months of expiry of limitation period.

(15) We are of the view that after expiry of the limitation period of filing appeal, the writ petition filed by the petitioner challenging the impugned order is not This view of us is getting support from the decision of the Hon’ble Supreme Court rendered in Assistant Commissioner (CT) LTU, Kakinada & Ors. (supra), which is also relied upon by the counsel for the petitioner.

(16) The Hon’ble Supreme Court in Assistant Commissioner (CT) LTU, Kakinada & Ors.’s case (supra) has held as under :

“14. A priori, we have no hesitation in taking the view that what this Court cannot do in exercise of its plenary powers under Article 142 of the Constitution, it is unfathomable as to how the High Court can take a different approach in the matter in reference to Article 226 of the Constitution. The principle underlying the rejection of such argument by this Court would apply on all fours to the exercise of power by the High Court under Article 226 of the Constitution.

15. We may now revert to the Full Bench decision of the Andhra Pradesh High Court in Electronics Corporation of India Ltd. (supra), which had adopted the view taken by the Full Bench of the Gujarat High Court in Panoli Intermediate (India) Pvt. Ltd. v. Union of India and Ors. and also of the Karnataka High Court in Phoenix Plasts Co. v. Commissioner of Central Excise (Appeal-I), Bangalore. The logic applied in these decisions proceeds on fallacious premise. For, these decisions are premised on the logic that provision such as Section 31 of the 1995 Act, cannot curtail the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This approach is faulty. It is not a matter of taking away the jurisdiction of the High Court. In a given case, the Assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same is without jurisdiction or passed in excess of jurisdiction‑ by overstepping or crossing the limits of jurisdiction including in flagrant disregard of law and Rules of procedure or in violation of principles of natural justice, where no procedure is specified. The High Court may accede to such a challenge and can also non-suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. However, if the writ petitioner chooses to approach the High Court after expiry of the maximum limitation period of 60 days prescribed under Section 31 of the 2005 Act, the High Court cannot disregard the statutory period for redressal of the grievance and entertain the writ petition of such a party as a matter of course. Doing so would be in the teeth of the principle underlying the dictum of a three Judge Bench of this Court in Oil and Natural Gas Corporation Limited (supra). In other words, the fact that the High Court has wide powers, does not mean that it would issue a writ which may be inconsistent with the legislative intent regarding the dispensation explicitly prescribed under Section 31 of the 2005 Act. That would render the legislative scheme and intention behind the stated provision otiose.”

(Emphasis Supplied)

(17) As observed earlier, the petitioner has not filed any statutory appeal before the appellate authority within the limitation period and has directly filed this writ petition before this Court after eight months of the expiry of limitation, we are of the view that as per the law laid down by the Hon’ble Supreme Court rendered in Assistant Commissioner (CT) LTU, Kakinada & Ors.’s case (supra), the writ petition filed by the petitioner cannot be entertained as being not maintainable.

(18) In view of the above discussion, this writ petition is hereby dismissed.”

4. Since the matter involves a question of law as to whether a person can be rendered remediless, particularly, for earning his livelihood due to not uploading of his GST details within the stipulated time frame, therefore, the same requires consideration.

5. This Court is also conscious of the fact that the validity of Section 107 of the Act of 2017 is pending consideration as informed by Mr. Vaishnav, learned counsel for the respondents.

6. At this juncture, this Court finds that the observations made by the Hon’ble Apex Court in the judgment rendered in the case of The Assistant Commissioner of State Tax & Ors. v. M/s Commercial Steel Limited (Civil Appeal No.5121 of 2021 decided on 03.09.2021) are relevant to the present case, and thus, relevant portion of the said judgment is reproduced hereunder:

“11. The respondent had a statutory remedy under Section 107. Instead of availing of the remedy, the respondent instituted a petition under Article 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is:

(i) a breach of fundamental rights;

(ii) a violation of the principles of natural justice;

(iii) an excess of jurisdiction; or

(iv) a challenge to the vires of the statute or delegated legislation.”

7. The matter is listed in the fresh category, therefore, the writ petition deserves to be admitted.

8. Admit.

9. Issue notice.

10. Kuldeep Vaishnav, learned counsel is already appearing on behalf of all the respondents, thus, service is complete.

11. List the matter on 29.04.2024.

12. In the meanwhile and until further orders, effect and operation of the order dated 24.02.2023 (Annex.3) shall remain stayed and the petitioner shall be provisionally permitted to upload his GST details with the respondents subject to final outcome of this writ petition. The respondents, while permitting the petitioner to upload the GST details, shall be at liberty to impose any late fee penalty in accordance with Section 47 of the Act of 2017.

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