The Court emphasized the right to seek revocation of GST registration cancellation, highlighting the need for fairness in circumstances obstructing compliance due to health issues.

JUDGMENT :

Ravindra V. Ghuge, J.

1. Leave to correct prayer clause C. Correction be carried out forthwith.

2. Rule. Rule made returnable forthwith and heard finally by the consent of the parties.

3. At the outset, two aspects are admitted by the parties. Firstly, that the Deputy Commissioner (Appeals), Chhatrapati Sambhajinagar, did not have the jurisdiction to condone the delay caused in filing the GST Appeal and, therefore, the order dated 18.12.2023, cannot be faulted. Secondly, the State Tax Officer suspended the registration of the Petitioner vide order dated 23.01.2023, with effect from 01.01.2022, only on the ground that the Petitioner failed to submit the tax returns for 6 consecutive months.

4. The Petitioner was registered with the GST Authority with the registration number mentioned in paragraph No.1 of the petition. He was also registered under the Maharashtra Shops and Establishments Act. He had a petty business of recovering loan installments for a few banks like HDFC Bank. In short, he was a Recovering Agent and was providing service to the banks.

5. The Petitioner was registered under the Central Goods and Service Tax Act, 2017 as well as the Maharashtra State Goods and Service Tax Act, 2017. He has registration certificates under both the Acts, which are placed on record.

6. In paragraph No.4 of the petition, the Petitioner has averred that as per Section 29 of the GST Act, a Competent Officer, either on his own motion or on an application filed by a registered person or by his legal heirs, can cancel the registration under the said Act. Section 29 (2) enables the Competent Officer to cancel the registration of an entity if a registered person paying the tax has not furnished the returns for three consecutive periods. One period comprises of one month. It is further averred that the Petitioner’s service would fall under the Reverse Charge Mechanism (RCM) under which, it is the service recipient who has to bear the Service Tax on the services availed by him. Hence, even if the Petitioner files returns, he would have to mention the tax payable as NIL. Nevertheless, the returns in form GSTR-3B under the GST Act, is the mandate of law.

7. The Petitioner failed to tender the returns as noted above and was issued with the show cause notice in GST REG- 31, dated 11.08.2022. He was called upon to explain as to why his GST registration should not be cancelled purely on account of failing to tender the tax returns for six consecutive months. The Petitioner concedes that no reply was filed on account of his Accountant suffering from Covid-19 related health issues. It is in the absence of the reply that the impugned order dated 23.01.2023 was passed by which, his registration certificate under the MGST Act, was cancelled with effect from 01.01.2022. The order for cancellation of registration indicates the sole reason to be “whereas no reply to notice to show cause has been submitted” and “whereas on the day fixed for hearing you did not appear”. However, the impugned order indicates that there is a ‘NIL’ demand from the Petitioner. The Petitioner makes a statement that after passing of the impugned order, the Petitioner has not indulged in any business.

8. The Petitioner places reliance upon the judgment dated 16.02.2023, delivered by a co-ordinate Bench of this Court in Writ Petition No.11833/2022 ( Rohit Enterprises Vs. the Commissioner State GST and others ). Reliance is placed on this judgment since the co-ordinate Bench concluded that though the Registration Certificate may have been cancelled, the Government cannot curtail the right of an individua