Rohit Enterprises Through Its ... vs The Commissioner State Gst Bhavan ...
2023 Latest Caselaw 1585 Bom

                                1               WP-11833-2022-J...

         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                   BENCH AT AURANGABAD

                        WRIT PETITION NO. 11833 OF 2022


Rohit Enterprises (Reg. no. 27AHQPD2485F1Z7)
Through its proprietor,
Changdeo Punjaji Deokar,
Age 56 yrs. Occ. Business,
r/o Bajaj Nagar, RN 18/5
Jai Yogehswar Housing Society,
MIDC Waluj, Gangapur,
Aurangabad-431136                                         ...Petitioner

                Versus

1.       The Commissioner
         State GST Bhavan,
         Railway Station Road
         Aurangabad.
2.       The Dy. Commissioner,
         State Tax (Appeal)
         Aur.-VAT-E-001,
         Railway Station Road, Aurangabad.

3.       The State Tax Officer,
         Aurangabad
         Railway Station Road, Aurangabad                   ...Respondents


Mr Alok Sharma, Advocate for Petitioner
Mr A.S. Shinde, AGP for Respondent Nos. 1 to 3/State


                        CORAM          :   MANGESH S. PATIL AND
                                           S.G. CHAPALGAONKAR, JJ.

RESERVED ON : 31-01-2023 PRONOUNCED ON : 16-02-2023

JUDGMENT : ( PER S.G. CHAPALGAONKAR, J. )

1. Rule. Rule is made returnable forthwith. The petition is heard finally,

with the consent of the learned counsel for the parties.

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2. The petitioner approaches this Court under Article 226 of the

Constitution of India with following prayers :-

       (B)      That the order passed in Appeal no. DC/APP/E-
                001/ABAD/GST/323/2022-2023 Dy. Commissioner
                (Appeal) Aurangabad may kindly be quashed and set
                aside.

       (C)      That the order passed by the State Tax Officer dt.

14.3.2022 of cancellation of registration may kindly be quashed and set aside.

(D) That, the order dt. 28.2.2022 passed by the State Tax Officer suspending the registration w.e.f. 28.2.2022 may kindly be quashed and set aside.

(E) That, the Hon'ble High court may kindly hold that, the petitioner registration no.27AHQPD2485F1Z7 is valid from 28.2.20222 onwards.

3. The petitioner is a proprietary firm engaged in the business of

fabrication work. It is registered under the Central Goods and Services Tax

Act, 2017 (GST Act) as well as Maharashtra State Goods and Services

Tax Act, 2017. The certificate of registration dated 20-07-2018 has been

issued to his firm with registration No. 27AHQPD2485F1Z7. Petitioner

contends that since he had undergone angioplasty, and the firm suffered

financial set back in pandemic situation, GST returns from August 2021

could not be filed. Section 29(2) of the GST Act enables proper officer to

cancel registration if registered person / firm fails to furnish three

consecutive returns. The State Tax Officer, Aurangabad issued a show

cause notice dated 28-02-2022 calling upon the petitioner to furnish his

explanation within a period of 7 working days. The notice stipulated that

the registration of the petitioner stood suspended. The petitioner replied

the show cause notice on 03-03-2022. Citing the reason of the financial

3 WP-11833-2022-J...

crunch, he requested for revocation of the notice. However, the State Tax

Officer vide order dated 14-03-2022 cancelled the registration with effect

from 21-08-2021.

4. The petitioner requested for revocation of the cancellation of

registration. In response, the State Tax Officer issued show cause notice

for rejection of the application. The petitioner was called upon to furnish

the reply within 7 days along with supporting documents like bank

statement till the date of the notice, challan of tax, interest and late filing

penalty. The matter was taken up for hearing on 25-04-2022. Finally, the

State Tax Officer rejected the application of petitioner seeking revocation

of cancellation vide order dated 17-05-2022.

5. The petitioner filed appeal under section 107 of the Maharashtra

Goods and Service Tax Act, 2017 challenging cancellation of registration.

It was registered as Appeal No. DCST/Appl./E-001/GST-Revocation/2022-

2023/B-619. The Dy. Commissioner/State Tax (Appeal), Aurangabad

Division rejected the appeal on the ground of limitation that the appeal has

been submitted beyond the prescribed period provided under section 107

(1) and 107 (4) of the MGST Act, 2017.

6. Mr Alok Sharma, learned advocate appearing for the petitioner

submits that the petitioner is the vendor of the Bajaj Auto Limited and

earns his livelihood through fabrication business. Due to pandemic

situation, the business activities of the petitioner were hampered causing

huge financial loss. The petitioner was also unwell. In August 2021, he

underwent angioplasty. Mr Sharma would further submit that petitioner

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could not submit his GST returns during the relevant period and suffered

cancellation of the resignation. He would submit that the petitioner had

approached the appellate authority challenging cancellation of the

registration. However, his appeal came to be rejected on technical

grounds as it was time barred. The appellate authority is not vested with

the powers to condone delay of more than 30 days as per section 107 of

the GST Act. The petitioner would not be in a position to continue his

business in absence of registration and would face starvation. He would

urge this Court to exercise jurisdiction under Art. 226 of the Constitution of

India to protect the fundamental right guaranteed under Art. 19 and 21 of

the Constitution of India in favour of the petitioner.

7. Mr A.S. Shinde, learned AGP supports the impugned order. He

would submit that the petitioner was given reasonable opportunity before

cancellation of the registration. The show cause notice was issued to him

on 28-02-2022 along with order of suspension of registration. The

petitioner was further given opportunity to furnish the documents while

dealing with his application for revocation of cancellation of registration.

The petitioner failed to avail the opportunity, consequently suffered the

order of rejection of the application for revocation of cancellation of

registration. He would further point out that petitioner failed to file appeal

within prescribed period of limitation under section 107(4) of the GST Act,

2017. The appellate authority has rightly dismissed the appeal which was

apparently barred by limitation. The petitioner has already availed statutory

remedy. Hence, he is not entitled to invoke extraordinary jurisdiction of

this Court under Art. 226 of the Constitution of India.

5 WP-11833-2022-J...

8. We have considered the submissions advanced by both the sides. It

appears that the petitioner was earning his livelihood through his

fabrication business and requires registration under GST Act to run the

business. The entire world suffered during the pandemic. The small scale

industrialists and service providers like petitioner lost their business for

more than two years. The financial losses suffered during this time cannot

be ignored particularly when it comes to small scale businesses and

service providers. To add apathy to this situation, the petitioner suffered

medical emergency. He was required to undergo medical treatment for

heart disease and the procedure like angioplasty. The stringent provisions

of GST Act took its own course. The petitioner suffered cancellation of

registration. Even he lost his appellate remedy because of lapse of

limitation. The petitioner has been practically left remediless. He seeks to

invoke jurisdiction of this Court under Art. 226 of the Constitution of India.

9. In our view, the provisions of GST enactment cannot be interpreted

so as to deny right to carry on Trade and Commerce to any citizen and

subjects. The constitutional guarantee is unconditional and unequivocal

and must be enforced regardless of shortcomings in the scheme of GST

enactment. The right to carry on trade or profession cannot be curtailed

contrary to the constitutional guarantee under Art. 19(1)(g) and Article 21

of the Constitution of India. If the person like petitioner is not allowed to

revive the registration, the state would suffer loss of revenue and the

ultimate goal under GST regime will stand defeated. The petitioner

6 WP-11833-2022-J...

deserves a chance to come back into GST fold and carry on his business

in legitimate manner.

10. There is one more aspect as far as the issue regarding limitation in

filing the appeal under Section 107 of MGST Act is concerned. Indeed the

Deputy Commissiosner of State Tax has no power to condone the delay

beyond 30 days. But then one cannot overlook the aspect of provisions

stipulating limitations. The objective is to terminate the lis and not to divest

a person of the right vested in him by efflux of time.

11. Since it is merely a matter of cancellation of registration, the

question of limitation should not bother us since it cannot be said that any

right has accrued to the State which would rather be adversely affected by

cancellation.

12. In this regard, a reference can be made to the judgment of the

Supreme Court in the case of Mafatlal Industries Ltd. Vs Union of India

reported in (1997) 5 SCC 536. The supreme court observed that the

jurisdiction of the High Court under Art. 226 of the Constitution of India or

Supreme Court under Article 32 cannot be restricted by the provision of

any Act to bar or curtail remedies. True that while exercising the

constitutional power, the Court would certainly take note of legislative

intent manifested in the provisions of the Act and would exercise

jurisdiction consistent with the provisions of enactment. The constitutional

Courts in exercise of such powers cannot ignore law nor can it override it.

7 WP-11833-2022-J...

13. Applying the aforesaid gidelines to the facts of the present case, we

find that the petitioner, who is sufferer of unique circumstances resulting

from pandemic and his health barriers, would be put to great hardship for

want of GST registration. The petitioner who is small scale entrepreneur

cannot carry on production activities in absence of GST registration.

Resultantly, his right to livelihood would be affected. Since his statutory

appeal suffered dismissal on technical ground, we cannot allow the

situation to continue. We find that, in the facts and circumstances of this

case it would be appropriate to exercise our jurisdiction under Art. 226 of

the Constitution of India.

14 Even looking to the object of the provisions under GST Act, it is not

in the interest of the government to curtail the right of the entrepreneur like

petitioner. The petitioner must be allowed to continue business and to

contribute to the state's revenue. The learned advocate for the petitioner

has submitted before us that the petitioner is ready and willing to pay all

the dues along with penalty and interest as applicable. In the light of the

above submission, we are inclined to allow the writ petition as under :-

 (i)     The writ petition is allowed.

 (ii)    The order dated 28-02-2022 suspending the GST registration, the

order dated 14-03-2022 cancelling GST registration of the petitioner passed by the State Tax Officer and the order dated 21-10-2022 passed by the Dy. Commissioner of Tax, Aurangabad (Appeal) No.DC/APP/E-001/ABAD/GST/323/2022-2023 are quashed and set aside.

8 WP-11833-2022-J...

(iii) We hold and declare that the registration No.27AHQPD2485F1Z7 in the name of the petitioner is valid, from 28-02-2022 onwards subject to the condition that the petitioner files up to date GST returns and deposits entire pending dues along with applicable interest, penalty, late fees in terms of Rule 23 (1) of MAST Rules, 2017.

 (iv)    The Rule is made absolute in above terms.




 [ S. G. CHAPALGAONKAR, J. ]                    [ MANGESH S. PATIL, J. ]




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