GST Update No 305 on restoration of registration so that business is not hampered

The departmental authorities cancel the GST registration of the business houses on frivolous and unreasonable grounds which increases the hardships of the taxpayers. There had been various decisions wherein the GST registration was not granted for want of unnecessary documents which were not prescribed in the statue. Recently, on similar note, one case was reported before Rajasthan High Court in the case of M/S POONAMCHAND SARAN V/S UNION OF INDIA. The decision imparted in this case is subject matter of our present update.
The petitioner are dealers registered under GST Act. The registration was cancelled by the authority vide order dated 09.09.2022 and 09.05.2022. The petitioner filed an e-appeal in time but was not able to submit the hard copy of the same. Further, the appellant failed to file an appeal against the cancellation order. The petitioner challenged the order dated 09.09.2022 which was rejected being time barred. Grievance was raised by the appellant of not being able to file appeal due to unavoidable reasons. Reliance was placed on following decisions in support of their contention that the appeal should be considered if there are procedural lapses:
• M/s G.G. Agencies Girijeshwar Rice Mills V/s The State of Karnataka & Ors.
• Vinod Kumar & Commissioner of Uttarakhand State GST & Ors.
• Madras High Court in the case of TVL. Suguna Cutpiece Centre V/s The Appellate Deputy Commissioner (ST) (GST), The Assistant Commissioner
• Madras High Court in the case of M/s Trans India Carco Carriers V/s The Assistant Commissioner (Circle)
It was argued that the petitioner is left with no remedy due to hyper-technical reasons for rejection of appeal filed against cancellation of GST registration such as appeal not filed in hard copy. It was further argued that the petitionersare deprived of opportunity of doing business which resulted into loss of revenue and livelihood which is violative of Article 21 of the Constitution of India. It was therefore requested to give one more opportunity to the petitioner to file an appeal.
The counsel of revenue opposed the submissions of the petitioner. However, he was not in a position to dispute the fact that legal proposition as delivered by High Courts in judgements referred to are correct.
The Court stated that the fact cannot be denied that the petitioner would not be able to continue the business in absence of GST registration. Further, it would deprive them of their livelihood since it amounts to violation of right of life and liberty under Article 21 of the Constitution of India. Therefore, the order was set aside and petitioner was given liberty to file appeal against the cancellation of GST registration within a period of 10 days from the date of order.
The above decision is a welcoming decision by the business houses wherein the court have acknowledged the fact that cancellation of GST registration will be a lose-lose situation for both Government and taxpayers. The need of the hour is that judicial rulings like these should be followed by the tax officers for restoration of cancelled GST registrations rather than upholding the orders for cancellation the registration on frivolous grounds.

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GST Update No 305 on restoration of registration so that business is not hampered

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