The Calcutta High Court in a significant case held that Goods and Service Tax ( GST ) Registration cannot be cancelled for Non-filing of return when there is no dubious process to evade tax.
Pranabesh Sarkar, the petitioner/ assessee was served with a notice of show cause as to why his registration of the petitioner under the West Bengal GST Act, 2017 (W.B GST )shall not be cancelled for the assessee having failed to file his returns for a continuous period of six months.
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The counsel for the assessee submitted that the assessee was and is all along interested to comply with the provisions of the W.B GST Act, however unfortunately by reasons of his failure to file response could not be brought to the notice of Department. The Departmental authorities contended that even though the assessee was given opportunity to show cause, he failed to reply to the show cause notice, resulting in cancellation of his registration.
The Single Bench of Justice Raja Basu Chowdhury found that the registration of assessee had been cancelled on the ground of non-filing of returns. However, it was not the case of Department that the assessee had been adopting dubious process to evade tax, added the Bench. Further viewed that unless the assessee files his returns, the Department cannot determine the final liability.
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The Bench directed the respondents/ Department to take a pragmatic view in the matter and permit the assessee to carry on his business. Further clarified that if the assessee complies with the directions, then the assessee’s registration under W.B GST Act shall be restored by the Jurisdictional Officer.
The Court set aside the order cancelling the registration of the assessee subject to the condition that the assessee files his returns for the entire period of default and pays requisite amount of tax and interest and fine and penalty, if not already paid.
Sandip Choraria & Rishav Manna appeared for the petitioner and Uday Sankar Bhattacharya, Sujit Mitra, Banani Bhattacharya, Debasish Chakraborty & Soumen Bhattacharya appeared for the respondent
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