The Madras High court has directed the assessee to pay GST for a period subsequent to the cancellation of registration by declaring the correct value of supplies.
Many Writ Petitions have been filed which pertain to the challenge to the cancellation of GST Registrations issued to the petitioners under the provisions of the Tamil Nadu Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017. Some of the petitioners have filed these Writ Petitions against the order of the cancellation of GST registration, while some of the petitioners have filed these Writ Petitions against the order passed in the appeals filed against the order of the cancellation of GST registration.
The provisions of the GST enactments cannot be interpreted so as to deny the right to carry on Trade and Commerce to a citizen and subjects. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of the defect in the scheme of the GST enactments. The right to carry on trade or profession also cannot be curtailed. Only reasonable restrictions can be imposed. To deny such rights would militate against their rights under Article 14, read with Article 19 (1)(g) and Article 21 of the Constitution of India.
The single bench of Justice C.Saravanan has observed that as original or as appellate authority exercising power under the respective enactments, quasi-judicial officers were bound by the provisions of the Act and the limitation under it, they have acted in accordance with the law. They cannot look beyond the limitations prescribed under provisions of the Act. Therefore, no fault can be attributed to their actions.
The court held that this is a fit case for exercising the power under Article 226 of the Constitution of India in favor of the petitioners by quashing the impugned orders and granting consequential relief to the petitioners. By doing so, the Court is effectuating the object under the GST enactment of levying and collecting just tax from every assessee who either supplies goods or services. Legitimate Trade and Commerce by every supplier should be allowed to be carried on subject to payment of tax and statutory compliance. Therefore, the impugned orders deserve to be quashed.
“These petitioners deserve a chance and therefore should be allowed to revive their registration so that they can proceed to regularize the defaults. The authorities acting under the Act may impose a penalty with the gravity of lapses committed by these petitioners by issuing notice. If required, the Central Government and the State Government may also suitably amend the Rules to levy penalty so that it acts as a deterrent on others from adopting the casual approach,” the court said.
The court has issued the directions to the petitioner file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid.
“If any Input Tax Credit has remained utilized, it shall not be utilised until it is scrutinized and approved by an appropriate or a competent officer of the Department,” the court directed.
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