In a significant case, the Bombay high court has recently while ordering to restore registration after payment of dues held that the Goods and Service Tax Act did not intend to curtail rights of entrepreneurs.
The petitioner Rohit Enterprises is a proprietary firm engaged in the business of fabrication work. It is registered under the Central Goods and Services Tax Act, 2017 ( GST Act ) as well as Maharashtra State Goods and Services Tax Act, 2017. Petitioner contends that since he had undergone angioplasty, and the firm suffered financial setbacks in the pandemic situation, GST returns from August 2021 could not be filed.
As per Section 29(2) of the GST Act, the proper officer cancels the registration of petitioner firms and the petitioner requests for revocation of the cancellation of registration but the officer rejects the application.
The Petitioner filed an appeal before Maharashtra Goods and Service Tax Act, 2017 challenging the cancellation of registration. Appeal of the petitioner was rejected. Against the order, petitioner filed the writ petition before the court
Alok Sharma, counsel for the petitioner submits that Due to the pandemic situation, the business activities of the petitioner were hampered causing huge financial losses. The petitioner was also unwell. Due to this reason, the petitioner could not file the GST return and suffered the cancellation of the resignation.
Further counsel contended that petitioner would not be in a position to continue his business in absence of registration and would face starvation. He would urge this Court to exercise jurisdiction under Art. 226 of the Constitution of India to protect the fundamental right guaranteed under Art. 19 and 21 of the Constitution of India.
A.S. Shinde counsel for the revenue submits that the petitioner was given a reasonable opportunity before cancellation of the registration. Further Petitioner failed to file an appeal within the prescribed period of limitation under section 107(4) of the GST Act, 2017. Appellate Authority has rightly dismissed the appeal which was apparently barred by limitation.
After considering the contentions of both parties the division bench of Justice Mangesh S. Patil and S.G. Chapalgaonkar allowed the writ petition and,
Observed that petitioner, who is a sufferer of unique circumstances resulting from the pandemic and his health barriers, would be put to great hardship for want of GST registration. The petitioner who is a small scale entrepreneur could not carry on production activities in absence of GST registration. Resultantly, his right to livelihood would be affected.
Further, the bench determined that the Provision of GST enactment could not be interpreted so as to deny the right to carry on Trade and Commerce to any citizen and subjects. If a person like the petitioner is not allowed to revive the registration, the state would suffer loss of revenue and the ultimate goal under the GST regime will stand defeated.
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