3 Star Foam And Furnishing Vs Superintendent Of Central Tax
Date: July 1, 2024
Subject Matter
Registration restored as the order of cancellation of registration is cryptic
Summary
The petitioner challenges the validity of the order by the GST authority that led to the cancellation of their GST registration, which was communicated in an order dated January 31, 2023. The petitioner also contests a subsequent order from an appellate authority dated January 1, 2024, that upheld the cancellation, noting that the appeal was filed too late for the delay to be condoned. - The petitioner asserts that they had valid reasons for not responding to queries related to the cancellation, citing personal circumstances such as their father's illness and financial hardships. - The court recognized the need to examine the grounds for cancellation, as the original order was described as cryptic and seemingly did not consider the petitioner’s explanations or responses. - Ultimately, the court set aside the cancellation order (Annexure-B) and reinstated the petitioner’s registration, requiring them to file all due GST returns and clear outstanding dues within four weeks of receiving the court’s order. The court indicated that the appellate authority's order (Annexure-A) would not require further adjudication since the original cancellation was invalidated. The petition was thus resolved in favor of the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the validity of the order passed by respondent No.2 at Annexure-‘B’ dated 31.01.2023 whereby the registration of petitioner has been cancelled. The petitioner has also challenged the order at Annexure-‘A’ dated 01.01.2024, whereby the Appellate Authority has confirmed the order of cancellation and appeal has been rejected, while observing that the appeal is filed beyond the period within which the delay could be condoned.
2. It is the case of the petitioner that this Court, in exercise of power under Article 226 of the Constitution of India can enter into the correctness of the order at Annexure-‘B’ itself and accordingly, even side stepping the order of Appellate Authority at Annexure-‘A’, the Court can take up the order of cancellation at Annexure-‘B’ and decide on the legal validity of the same.
3. It is further submitted that the reasons leading to cancellation of registration is due to bona fide reasons and that the petitioner was not in a position to place such bona fide reasons before the Authority, as his father was unwell and was suffering from serious financial constraints.
4. Taking note that the order at Annexure-‘B’ is passed only on the ground that the petitioner had not responded to the queries in the system and also noticing that the order of cancellation of registration is cryptic and that the Authority was not in a position to appreciate the stand of the petitioner in the absence of any reply, the matter requires consideration. The Court can consider the validity of Annexure-‘B’, even in exercise of power under Article 226 of the Constitution of India under appropriate circumstances.
5. In light of the contentions made out and the reasons assigned for not having participated in the proceedings and also explaining the lapse in not filing the GST returns, the order at Annexure-‘B’ dated 31.01.2023 is set aside and the registration of petitioner would stand revived which would be subject to the condition that the petitioner is to file the returns from 31.01.2023 till date and clear all the dues and the said process is to be completed within four weeks from the date of receipt of certified copy of the order. Further, in light of deciding on the validity of Annexure-‘B’, the order of confirmation passed by the Appellate Authority at Annexure-‘A’ need not be entered into and is liable to be ignored and does not call for any adjudication.
Accordingly, the petition is disposed off.