Kerala High Court
Shri. Pandarakandiyil ... vs The Superintendent Of Central Tax ... on 6 July, 2022
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
WEDNESDAY, THE 6TH DAY OF JULY 2022 / 15TH ASHADHA, 1944
WP(C) NO. 19904 OF 2022
PETITIONER/S:
SHRI. PANDARAKANDIYIL MOIDEENKUTTY,
AGED 72 YEARS
TP 4/58, KOYILANDI RAROTH, KOZHIKODE KERALA, 673573
REPRESENTED BY PROPRIETOR P.K. MOIDEENKUTTY.
BY ADVS.
M.K.HAJARA
C.RAMACHANDRAN
RESPONDENT/S:
1 THE SUPERINTENDENT OF CENTRAL TAX AND CENTRAL EXCISE,
THAMARASSERY RANGE KOZHIKODE, KERALA, 673573.
2 THE JOINT COMMISSIONER (APPEALS) ,
STATE GOODS & SERVICES TAX DEPARTMENT, ERANHIPALAM PO
KOZHIKODE, 673006.
3 GOODS AND SERVICES TAX NETWORK,
REPRESENTED BY ITS CHAIRMAN, EAST WING, 4TH FLOOR, WORK
MARK-1, AEROCITY, NEW DELHI- 110 037
4 THE COMMISSIONER OF STATE TAXES,
TAX TOWER, KILLIPPALAM, KARAMANA -P.O,
THIRUVANANTHAPURAM-695002.
BY ADV P.G.JAYASHANKAR
ADV. THUSHARA JAMES (SR GP)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
06.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 19904 OF 2022 2
JUDGMENT
Petitioner is the proprietor of a business engaged in
execution of works contracts. He had obtained a registration
under the Central Goods and Services Tax Act and Kerala State
Goods and Services Tax Act of 2017. The said registration came
to be cancelled on 02.02.2021 on account of non-filing of
returns. As per Section 30 of the CGST Act, 2017, the time
limit for applying for the revocation of registration was 30 days
from 02.02.2021. The said period of 30 days could be extended
by the Joint Commissioner for a further period of 30 days.
However, the petitioner did not file any application for
revocation of registration. The petitioner, ultimately filed an
appeal under Section 107 of the aforesaid Act before the
Appellate Authority, challenging the order revoking the
registration, on 20.11.2021. The said appeal was rejected by
Ext.P5 on 09.03.2022.
2. Learned counsel appearing for the petitioner has
raised several contentions including the contention that the
Hon'ble High court of Madras in W.P.(C.). No.25048 of 2021
and connected cases, had held as follows:-
''224. Notwithstanding the fact that the petitioners
have shown utter disregard to the provisions of the Acts
and have failed to take advantage of the amnesty scheme
given to revive their registration, this Court is inclined to
quash the impugned orders with grant consequential
reliefs subject to terms.
225. The provisions of the GST enactments cannot
be interpreted so as to deny the right to carry on Trade
and Commerce to a citizen and subjects. The
constitutional guarantee is unconditional and unequivocal
and must be enforced regardless of the defect in the
scheme of the GST enactments. The right to carry on
trade or professoin also cannot be curtailed. Only
reasonable restriction can be imposed. To deny such
rights would militate against their rights under Article
14, read with Article 19 (1)(g) and Article 21 of the
Constitution of India.
226. As original or as appellate authority
exercising power under the respective enactments, quasi
judicial officers were bound by the provisions of the Act
and the limitation under it, they have acted in accordance
with law. They cannot look beyond the limitations
prescribed under provisions of the Act. Therefore, no
fault can be attributed to their action.
227. This is a fit case for exercising the power
under Article 226 of the Constitution of India in favour of
the petitioners by quashing the impugned orders and to
grant consequential relief to the petitioners. By doing so,
the Court is effectuating the object under the GST
enactment of levying and collecting just tax from every
assessee who either supplies goods or service. Legitimate
Trade and Commerce by every supplier should be
allowed to be carried on subject to payment of tax and
statutory compliance. Therefore, the impugned orders
deserve to be quashed.
228. These petitioners deserve a chance and
therefore should be allowed to revive their registration so
that they can proceed to regularize the defaults. The
authorities acting under the Act may impose penalty with
the gravity of lapses committed by these petitioners by
issuing notice. If required, the Central Government and
the State Government may also suitably amend the Rules
to levy penalty so that it acts as a deterrent on others
from adopting casual approach.''
It is submitted that, as far as the petitioner is concerned, the
petitioner will be put to great prejudice and hardship, if the
cancellation of registration is not revoked as the petitioner is
unable to collect amounts from various Government agencies
for works completed by the petitioner. It is submitted that
those Government agencies will not release payments to the
petitioner, if there is mismatch in the GST registration details.
3. Learned Senior Government Pleader appearing for
respondent Nos.2 and 4 and the learned Senior Standing
Counselappearing for respondent Nos.1 and 3 would point out
the provisions of section 29 and 30 of the CGST Act and submit
that there is absolutely nothing illegal about the orders
impugned as they are orders issued completely in consonance
with the statutory provisions and require no interference under
Article 226 of the Constitution of India. It is submitted that the
judgment of the Hon'ble Madras High Court essentially results
in the entire statutory scheme being violated and may not be
treated as a precedent in this Court. It is submitted that there
is no question of the petitioner being unable to carry on his
business as it is always open to the petitioner to apply for a new
registration and carry on business with the new registration. It
is pointed out that the cancellation of earlier registration does
not cause any prejudice to the petitioner. It is submitted that a
person who has not taken any steps within the timelines
provided by the Statute and also within any extended time
granted by the Circulars issued by the the Central Board of
Excise and Customs, cannot be heard to contend that
notwithstanding the statutory provisions, this Court, in the
exercise of Article 226 of the Constitution of India must direct
the restoration of the registration.
4. Considering the contentions raised by both sides, I
had requested Adv. A Kumar, learned counsel of this Court to
assist this Court to reach a proper conclusion in this matter.
Sri. A Kumar has placed before me judgment of the Division
Bench of the Gujarat High Court in Special Civil Application
No.3442 of 2022 [Tahura Enterprise V. Union of India] and
the judgment of the Madhya Pradesh High Court in W.P.
No.8162 of 2021 [MAA Sharda Construction Company V.
Union of India and Others] . It is submitted that the view
taken by the Madras High court should be the view to be
adopted by this Court since no tax law should be construed as
creating difficulties in the doing of business and the State
should essentially be concerned about collecting taxes and
penalties wherever applicable rather than relying on
technicalities to deny the restoration of registration in cases like
this. It is submitted that that even if this Court is to grant relief
to the petitioner, it would be open to this Court to hold that all
consequences of cancellation of registration, non-filing of
returns, non-payment of tax etc., will continue to apply
notwithstanding any direction issued by this Court to accept any
application for revocation filed by the petitioner beyond time. It
is submitted that in almost similar circumstances, the High
Court of Gujarat In Tahura Enterprises (Supra) held as
follows:-
''8. Indisputably, the cancellation of registration
was on the ground of non-filing of returns by the writ-
applicants. The impugned order cancelling the
registration came to be passed on 10.07.2019. The writ-
applicants preferred an application before the appellate
authority for revocation of cancellation of registration,
but such application was not entertained on the ground
that the same was time barred.
9. We take notice of the fact that the Central
Board of Indirect Taxes and Customs extended the time
limit for filing application for revocation of cancellation
of registration and the limitation for all the orders
passed on or before 12.06.2020 was to effectively
commence from 31.08.2020. As the application filed by
the writ applicants for revocation of cancellation of
registration was looked into by a quasi-judicial authority,
the order of the Supreme Court extending the period of
limitation in view of the Covid-19 Pandemic would apply
and in such circumstances, the limitation in accordance
with the order passed by the Central Board of Indirect
Taxes and Customs could be said to have been extended.
10. Indisputably, the application requesting for
restoration of registration was filed in July 2021 i.e.
during the period when the order of the Supreme Court
extending the limitation was in operation. More
importantly, the writ-applicants have paid the requisite
amount towards tax on the basis of self assessed liability
on 06.09.2021. Since the registration of certificate of the
writapplicants came to be cancelled solely on the ground
of non-filing of the returns, which was on account of non-
payment of tax and the writ-applicants now having paid
such outstanding tax, the registration certificate of the
writ-applicants should be ordered to be restored so that
they are able to continue with their business.
11. In view of the aforesaid, the impugned order
dated 10.07.2019 cancelling the registration certificate
is hereby quashed and set aside. The respondents are
directed to forthwith restore the registration certificate
of the writ-applicants under the provisions of the G.S.T.
Act.''
5. It is also brought to my notice by Sri. A Kumar that
considering the problems created by the Covid-19 pandemic,
the period from 15.03.2020 till 28.02.2022 had been excluded
for the purposes of any limitation by orders of the Hon'ble
Supreme Court of India in Suo Moto Writ Petition No.3 of 2020.
It is submitted that the periods of limitation prescribed under
Section 30 of the CGST Act should also be deemed to have been
extended by virtue of the orders of the Hon'ble Supreme Court
and therefore, the period of limitation should be read as
extended till 28.05.2022 as directed by the Hon'ble Supreme
Court in the Suo Moto Writ Petition No.3 of 2020, on
10.01.2022.
6. Having heard the learned counsel as above, I am of
the view that the the petitioner is entitled to relief. The facts of
this case show that the registration the petitioner was cancelled
on 02.02.2021. The petitioner had time of 30 days from
02.02.2021 to file an application for revocation. The said period
of 30 days could be extended by a period of 30 days by the Joint
Commissioner, going by the provisions contained in Section 30
of the CGST Act. If one were to apply the directions issued by
the Hon'ble Supreme Court in Suo Moto Writ Petition No.3 of
2020, to the periods of limitation prescribed by Section 30 of
the CGST Act, it can be held, without any difficulty, that the
petitioner had time till 28.05.2022 to file an application for
revocation. The petitioner filed an appeal and possibly, by bona
fide mistake, did so on 20.11.2021. This can only be seen as a
availing of a wrong remedy by the petitioner. If that date was
taken as the application for revocation, the period of the
application for revocation can be treated as one filed within
time.
Accordingly, this writ petition is allowed and it is directed
that if the petitioner files a fresh application for revocation
within seven days from the date of receipt of a certified copy of
this judgment, the same shall be treated as one filed on
20.11.2021 and the orders shall be passed by the 1 st respondent,
treating the application as one filed within time, taking into
consideration the orders of the Hon'ble Supreme Court in Suo
Moto Writ Petition No.3 of 2020. However, it is made clear that
all legal consequences under the provisions of the GST Acts and
the Rules (following cancellation of registration and belated
filing of returns) shall continue to operate against the
petitioner and the restoration of registration by orders of this
Court as above, will not result in the petitioner being absolved
of any statutory liability as aforesaid. In other words, the
statutory liabilities of the petitioner following cancellation of
registration, non-filing of returns and non-payment of tax will
continue to operate against the petitioner notwithstanding the
directions contained in this judgment.
The writ petition is allowed as above.
sd/-
GOPINATH P.
JUDGE
ajt
APPENDIX OF WP(C) 19904/2022
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF THE SHOW CAUSE NOTICE UNDER
SECTION 29 OF THE CGST ACT, 2017 DATED
07.01.2021
Exhibit P2 TRUE COPY OF THE CANCELLATION ORDER UNDER
SECTION 29 (2) (C) OF THE CGST ACT, 2017
DATED: 02.02.2021
Exhibit P3 COPY OF GSTR-3B RETURN FILED FOR THE MONTH OF
MARCH 2018-19.
Exhibit P3 (a) COPY OF GSTR-3B RETURN FILED FOR THE MONTH OF
MARCH 2019-20.
Exhibit P3 B COPY OF GSTR-3B RETURN FILED FOR THE MONTH OF
FEBRUARY 2020-21.
Exhibit P4 TRUE COPY OF THE CIRCULAR NO. 158/14/2021-GST
DATED THE 6TH SEPTEMBER 2021.
Exhibit P5 TRUE COPY OF THE APPELLATE ORDER DATED:
09.03.2022.
