Madras High Court
M/S.Kottaiyenthal Kanmai ... vs The State Tax Officer on 30 March, 2023
WP(MD)No.6915 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 30.03.2023
CORAM
THE HONOURABLE MS.JUSTICE P.T.ASHA
WP(MD)No.6915 of 2023 &
WMP(MD)No.6550 of 2023
M/s.Kottaiyenthal Kanmai Ayakkattutharakal Nala Sangam,
Represented by its President,
Gandhi Periyakaruppan,
3/105, Kottaiyenthal, Kadaladi,
Ramanathapuram, Tamil Nadu - 623 528.
... Petitioner
Vs.
The State Tax Officer,
Mudukulathur. ... Respondent
Prayer: Writ Petition filed under Article 226 of the Constitution of India
to issue a writ of certiorarified mandamus calling for the records of the
respondent in proceedings in Reference No.ZA330221215485 dated
17.02.2021 and quash the same and further direct the respondent to
revoke the cancellation of the petitioner's Registration under the GST Act
bearing GSTIN/UIN: 3AAGAK8072P1Z2.
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WP(MD)No.6915 of 2023
For Petitioner : Mr.A.Satheesh Murugan
For Respondent : Mr.T.Amjadkhan
Government Advocate
ORDER
The above writ petition is filed to quash the order of the
respondent dated 17.02.2021, in and by which, the petitioner's GST
Registration was cancelled and for a direction to the respondent to
revoke the cancellation of the petitioner's GST Registration.
2. The facts in brief are as follows.
2.1. The petitioner Association was formed by the agriculturists of
Kottaiyenthal Village, Ramanathapuram District for the welfare of the
agriculturists who are doing cultivation by using the water from
Kottaiyenthal Village. They were sometimes given the work of dredging
the lake and therefore, they have enrolled under the Tamil Nadu Goods
and Services Tax Act, 2017 (herein after referred as 'the Act') in GSTIN:
3AAGAK8072P1Z2.
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WP(MD)No.6915 of 2023
2.2. The petitioner Association had not filed GST for over 6
months since the agriculturists did not receive the contract amount from
the concerned Departments for the dredging work done by them.
Therefore, the GST Registration was cancelled by the respondent with
effect from 31.12.2020. Therefore, the petitioner Association left with no
other alternative has approached this Court, since the respondent is not
willing to restore the GST Registration.
3. The learned counsel for the petitioner Association would rely
upon the decision of the Principal Bench of this Court in Tvl.Suguna
Cutpiece vs. Appellate Deputy Commissioner (ST) (GST) and others
reported in 2022 (2) TMI 933, wherein, it was held that no useful purpose
would be served by keeping the petitioners out of the Goods and Services
Tax regime, as such assessee would still continue to do business and
supply goods and services.
4. The learned counsel for the respondent would also admit that the
above referred Judgment is being followed in similar matters.
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WP(MD)No.6915 of 2023
5. The relevant paragraphs of the said Judgment are extracted
hereunder:
"216. Since, no useful will be served by
not allowing persons like the petitioners to
revive their registration and integrate them
back into the main stream, I am of the view that
the impugned orders are liable to be quashed
and with few safeguards.
217. There are adequate safeguards
under the GST enactments which can also be
pressed against these petitioners even if their
registration are revived so that, there is no
abuse by these petitioners and there is enough
deterrence against default in either paying tax
or in complying with the procedures of filing
returns.
218. Further, the Government requires
tax to meet its expenditure. By not bringing
these petitioners within the GST fold,
unintended privilege may be conferred on these
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WP(MD)No.6915 of 2023
petitioners unfairly to not to pay GST should
they end supplying goods and/or services
without registration. For example, a person
renting out an immoveable property will
continue to supply such service irrespective of
registration or not.
219. Therefore, if such a person is not
allowed to revive the registration, the GST will
not be paid, unless of course, the recipient is
liable to pay tax on reverse charge basis.
Otherwise, also there will be no payment of
value added tax. The ultimate goal under the
GST regime will stand defeated. Therefore,
these petitioners deserve a right to come back
into the GST fold and carry on their trade and
business in a legitimate manner.
220. The provisions of the GST
Enactments and the Rules made there under
read with various clarifications issued by the
Central Government pursuant to the decision
of the GST Council and the Notification issued
thereunder the respective enactments also make
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WP(MD)No.6915 of 2023
it clear, intention is to only facilitate and not to
debar and de~recognised assesses from coming
back into the GST fold.
221. While exercising jurisdiction, under
Article 226 of the Constitution, the powers of
the Court to do justice i.e., what is good for the
society, can neither be restricted nor curtailed.
This power under Article 226 can be exercised
to effectuate the rule of law.
222. Therefore, power of this Court
under Article 226 of the Constitution of India is
being exercised cautiously in favour of the
petitioners as this power is conceived to serve
the ends of law and not to transgress them.
223. In Mafatlal Industries Ltd. Vs.
Union of India, (1997) 5 SCC 536, in
Paragraph No.77, the Hon'ble Supreme Court
observed that "So far as the jurisdiction of the
High Court under Article 226 - or for that
matter, the jurisdiction of this Court under
Article 32 - is concerned, it is obvious that the
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WP(MD)No.6915 of 2023
provisions of the Act cannot bar and curtail
these remedies. It is, however, equally obvious
that while exercising the power under Article
226/Article 32, the Court would certainly take
note of the legislative intent manifested in the
provisions of the Act and would exercise their
jurisdiction consistent with the provisions of
the enactment. Even while acting in exercise of
the said constitutional power, the High Court
cannot ignore the law nor can it override it.
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
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WP(MD)No.6915 of 2023
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
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WP(MD)No.6915 of 2023
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.
229. In the light of the above discussion,
these Writ Petitions are allowed subject to the
following conditions:~
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WP(MD)No.6915 of 2023
i. The petitioners are directed to file their
returns for the period prior to the cancellation
of registration, if such returns have not been
already filed, together with tax defaulted which
has not been paid prior to cancellation along
with interest for such belated payment of tax
and fine and fee fixed for belated filing of
returns for the defaulted period under the
provisions of the Act, within a period of forty
five (45) days from the date of receipt of a copy
of this order, if it has not been already paid.
ii.It is made clear that such payment of
Tax, Interest, fine / fee and etc. shall not be
allowed to be made or adjusted from and out of
any Input Tax Credit which may be lying
unutilized or unclaimed in the hands of these
petitioners.
iii.If any Input Tax Credit has remained
utilized, it shall not be utilised until it is
scrutinized and approved by an appropriate or
a competent officer of the Department.
iv.Only such approved Input Tax Credit
shall be allowed for being utilized thereafter
for discharging future tax liability under the
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WP(MD)No.6915 of 2023
Act and Rule.
v.The petitioners shall also pay GST and
file the returns for the period subsequent to the
cancellation of the registration by declaring
the correct value of supplies and payment of
GST shall also be in cash.
vi.If any Input Tax Credit was earned, it
shall be allowed to be utilised only after
scrutinising and approving by the respondents
or any other competent authority.
vii.The respondents may also impose
such restrictions / limitation on petitioners as
may be warranted to ensure that there is no
undue passing of Input Tax Credit pending
such exercise and to ensure that there is no
violation or an attempt to do bill trading by
taking advantage of this order.
viii.On payment of tax, penalty and
uploading of returns, the registration shall
stand revived forthwith.
ix.The respondents shall take suitable
steps by instructing GST Network, New Delhi
to make suitable changes in the architecture of
the GST Web portal to allow these petitioners
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WP(MD)No.6915 of 2023
to file their returns and to pay the
tax/penalty/fine.
x.The above exercise shall be carried out
by the respondents within a period of thirty
(30) days from the date of receipt of a copy of
this order."
6. Since the issue involved in this writ petition is similar, the writ
petition is disposed of in terms of the guidelines provided in the order in
Tvl.Suguna Cutpiece vs. Appellate Deputy Commissioner (ST) (GST) and
others (cited supra). No costs. Consequently the connected
Miscellaneous petition is closed.
30.03.2023
(1/2)
NCC:Yes/No
Index:Yes/No
Speaking/Non-speaking order
mbi
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WP(MD)No.6915 of 2023
To
The State Tax Officer,
Mudukulathur.
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WP(MD)No.6915 of 2023
P.T.ASHA, J.
mbi
WP(MD)No.6915 of 2023
30.03.2023
(1/2)
https://www.mhc.tn.gov.in/judis
