The Hon'ble High Court of Patna in Sai Constructions (A Sole Proprietorship Firm) v. Union of India [CIVIL WRIT JURISDICTION CASE NO.3964 OF 2024 dated March 4, 2024] dismissed a writ petition challenging the cancellation of GST registration. The Court declined to exercise discretion in favor of the assessee who had been negligent in not replying to the show cause notice, not availing the appellate remedy within the limitation period, and not utilizing the amnesty scheme offered by the government.
Facts of the Case:
The petitioner, Sai Constructions (A Sole Proprietorship Firm), approached the High Court challenging the cancellation of its GST registration dated May 12, 2023.
A show cause notice was issued to the petitioner on January 14, 2023, which the petitioner did not reply to.
The registration was subsequently cancelled on May 12, 2023.
The petitioner did not avail the appeal remedy provided against the cancellation order.
The Bihar Goods and Services Tax Act provides for condonation of delay under Section 107(4) if an appeal is filed within one month of the expiry of the limitation period. The appeal should have been filed by August 12, 2023, or with a delay condonation application by September 12, 2023.
The government had introduced an Amnesty Scheme through Circular No. 3 of 2023, allowing registered dealers whose registrations were cancelled to restore their registration by paying all dues between March 31, 2023, and August 31, 2023.
The petitioner did not avail of this scheme either.
The petitioner approached the High Court by way of a writ petition, challenging the
cancellation of registration.
High Court upholds GST registration cancellation, emphasizing importance of timely responses to notices, filing appeals, and utilizing amnesty schemes.
Held by the Court:
The Hon'ble High Court of Patna in Sai Constructions (A Sole Proprietorship Firm) v. Union of India [CIVIL WRIT JURISDICTION CASE NO.3964 OF 2024 dated March 4, 2024] held as under :
1. The High Court noted that the petitioner had not availed the appellate remedy provided against the cancellation order, and at this point, could not seek to avail it due to the expiration of the limitation period.
2. The Court observed that the petitioner had not utilized the Amnesty Scheme offered by the government through Circular No. 3 of 2023.
3. The High Court pointed out that since the petitioner was not a registered dealer, there was no monitoring of its activities by the Department in the intervening period.
4. The Court noted that there was no way to ascertain whether any transactions were carried out during the period when the petitioner's registration was cancelled.
5. The High Court emphasized that the petitioner had neither availed of the appellate remedy nor the Amnesty Scheme.
6. The Court observed that the petitioner did not controvert the allegation in the show cause notice that no returns were filed for the prescribed periods.
7. The High Court stated that the law favors the diligent and not the indolent, and the delay stands against the petitioner.
8. The Court declined to exercise its discretion in favor of the petitioner, considering the petitioner's negligence in not responding to the show cause notice, not availing the appellate remedy, and not utilizing the amnesty scheme.
9. The High Court dismissed the writ petition, refusing to interfere with the cancellation of registration.
Relevant Sections:
- "Section 29" of the Central Goods and Services Tax Act, 2017/Bihar Goods and Services Tax Act, 2017
- "Section 107" of the Central Goods and Services Tax Act, 2017/Bihar Goods and Services Tax Act, 2017
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