HC: Not Filing GST Returns isn't a reasonable ground to reject License Application for a Business that's yet to commence [Read Judgment]

The Division Bench of the Orissa HC in a writ petition against the non-granting of license for an IMFL Restaurant ON shop specifically made it clear that a Business that is yet to commence cannot be expected to have filled GST returns and license applications should not be rejected only on this basis.

Brief Facts

The Petitioner that is Galaxy Bar and Restaurant at Nayagarh has filed this writ petition because they were aggrieved by the non-grant of license for an IMFL Restaurant ON Shop and are seeking directions to the opposite parties for the grant of the same.

Observations of the Court

The Court heard the submissions of both sides and then noted that the Petitioner had filed for the Restaurant ON Shop licence on 5^th April 2022. The petitioner stated that they responded to various queries and provided clarifications as well, then enquiry also took place where objections had been raised and the Inspector of Excise submitted their report accordingly. According to this the Superintendent of Excise made a recommendation to the Collector, Nayagarh that the Petitioner’s application should be granted

However, different high-level joint inquiry were launched by the Commissioner of Excise and they went in favor of the Petitioner the Excise Deputy Commissioner informed the department that the restaurant was running in a commercial area. Another inquiry was ordered on 24^th January 2023 to determine if the petitioner was registered under the GST Act and if returns were filed thereunder.

Further, the court noted that nothing adverse was found with regards to the Petitioner’s application for an ON shop license and with the petitioner having a GST registration certificate and it was specifically made clear that such applications should not be rejected only on the basis of GST return not being filed because

Judgment of the Court

The Hon’ble Court held that it is unrealistic to expect that GST Return would be filed without actually commencing the business and the same cannot be a ground for rejecting the ON shop license application for the petitioner.

Case Title: M/s. Galaxy Bar and Restaurant v. State of Odisha and others

Coram :The Chief Justice – Dr. S. Muralidhar; Justice G. Satapathy

Case No. :W.P.(C) No. 6916 of 2023

Advocate for the Appellant:Mr. R.P. Kar, Advocate.

Advocate for the Respondent : Mr. Debakanta Mohanty, A.G.A. for the State

Read Judgment @LatestLaws.com

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