KANS WEDDING CENTRE Versus THE COMMISSIONER OF COMMERCIAL TAXES, COMMERCIAL TAX OFFICER>2021(02)LCX0128

2021(02)LCX0128

Kerala High Court

KANS WEDDING CENTRE

Versus

THE COMMISSIONER OF COMMERCIAL TAXES, COMMERCIAL TAX OFFICER

WP(C). No. 4227 OF 2021 decided on 18/02/2021

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

THE HONOURABLE MR. JUSTICE A.M.BADAR

THURSDAY, THE 18TH DAY OF FEBRUARY 2021 / 29TH MAGHA,1942

WP(C).No.4227 OF 2021(C)

PETITIONER:

KANS WEDDING CENTRE
300A, KAIPAMANGALAM, THRISSUR, KERALA-680 681,
REPRESENTED BY ITS MANAGING PARTNER, K.A. NIYAS.

BY ADVS.
SRI.SAIJO HASSAN
SRI.BENOJ C AUGUSTIN
SRI.RAFEEK. V.K.
SRI.U.M.HASSAN
SMT.P.PARVATHY
SMT.SURYA P SHAJI
SMT.AATHIRA SUNNY
SHRI.MANAS P HAMEED
SHRI.ELDHO.N.MONCY

RESPONDENTS:

1 THE COMMISSIONER OF COMMERCIAL TAXES
THIRUVANANTHAPURAM-695 002

2 COMMERCIAL TAX OFFICER,
COMMERCIAL TAX OFFICE, I CIRCLE, THRISSUR-680 003.

GP- SMT. THUSHARA JAMES

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT

Dated this the 18th day of February 2021

Petitioner, by this petition has prayed for the following relief.

Set aside Ext.P3 notice and permit the petitioner to remit the arrears of tax within a time frame fixed by this Hon'ble Court.

2. The learned counsel for the petitioner argues that the petitioner was regularly paying tax and in the last year but, because of Covid-19 pandemic, his business collapsed. According to the learned counsel for the petitioner, the petitioner is even now, ready and willing to file all returns and to pay tax which is due and payable by them. According to the learned counsel for the petitioner, the respondent ought not to have issued notice at Ext.P3 suspending its registration as it is affecting his business. The petitioner, therefore, prays for quashing and setting aside the communication at Ext.P3.

3. The learned Government Pleader opposed the petition by contending that the communication at Ext.P3 is only a notice in GST Form No. GST REG-17/31 issued under Rule 22(1) of the GST Rules. According to the learned Government Pleader, Section 29 of the GST Act 2017 empowers the proper officer to cancel the registration after issuing necessary show-cause notice on failure to file returns for a period of six months.

4. According to the learned Government Pleader, the petitioner is bound to respond to the show-cause notice for cancellation of registration and if necessary, he can approach the proper officer even for pre-ponement of date fixed for giving cause.

5. I have considered the submissions so advanced and also perused the materials placed before me. The petitioner's establishment came to be registered on 04/07/2020 and accordingly registration certificate, Ext.P1 came to be issued in its favour. On 11/02/2021, a notice in Form GST REG-17/31 came to be issued to the petitioner asking it to show-cause as to why its registration should not be canceled. The show-cause notice mention the reason for intended cancellation of registration as “any tax payer other than composition tax payer has not filed returns for a continuous period of six months”. The petitioner is directed by this show-cause notice to furnish the reply within 30 days and to appear before the proper officer on 26.03.2021. In the interregnum, registration of the petitioner is suspended by the proper officer.

6. It is not in dispute that the petitioner has not filed returns for a continuous period of six months. Section 29(2) of the GST Act, 2017 reads thus.

29. Cancellation [or suspension] of registration

“(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––

(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

(b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or

(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or

(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

[Provided further that during pendency of proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed]”

7. It is thus clear that, in the event the registered persons fail to file returns for a continuous period of six months, the proper officer can cancel the registration, but that has to be done by granting opportunity of hearing to the registered person. Rule 22 of the GST and ST Rules 2017 deals with procedure for cancellation of registration and as per requirement of this Rule, the registered person is required to be issued with a show-cause notice requiring him to show-cause as to why the registration shall not be canceled. Section 29 of the GST Act empowers the proper officer to suspend the registration during the pendency of proceedings relating to cancellation of registration. In the wake of these statutory provisions, I find no fault on the part of the proper officer in issuing the show-cause notice at Ext.P3 asking the petitioner to show-cause as to why the registration of the establishment should not be canceled.

8. Apprehension of the petitioner that the proceedings for cancellation of registration will continue for a long period and till then his registration is under suspension causing loss to his business can be taken care of by directing the petitioner to approach the proper officer for preponing the date. In this view of the matter, the following order:

The petition is dismissed. However petitioner is permitted to approach the proper officer for preponement of date of hearing by submitting his reply to the show-cause notice. If such request is made by the petitioner, the proper Officer shall consider the same and shall decide the proceedings expeditiously. If the petitioner cooperates with the proper Officer, it is expected of the proper Officer to dispose of the proceedings for show-cause notice of cancellation within a period of three weeks from the date of appearance of the petitioner.

Sd/-
A.M.BADAR
JUDGE

APPENDIX

PETITIONER'S/S EXHIBITS:

EXHIBIT P1 TRUE COPY OF THE PETITIONER'S FIRM'S REGISTRATION CERTIFICATE.

EXHIBIT P2 TRUE COPY OF THE PAYMENT RECEIPT ALONGWITH FORM -GSTR-3B DATED 8.12.2020 PERTAINING TO THE PERIOD NOV 2019-20

EXHIBIT P3 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 11.02.2021 ISSUED BY THE 2ND RESPONDENT.

//true copy//

PA to Judge

Equivalent .