The Calcutta High Court has held that GST registration cancellation would adversely affect the recovery of taxes and orders to revoke suspension of registration.
The appellant, Bisweswar Madhya challenged the order dated 22.08.2022 passed in WPA No.18134 of 2022 which is still pending before the learned Single Bench.
The appellant challenged a show cause notice for cancellation of registration granted to the appellanton the ground that there is no final order of adjudication passed by the competent authority quantifying the tax liability payable by the appellant.
It was evident that to the date no show cause notice has been issued to the appellant either by the Anti-Evasion Wing or the Audit Department of the respondent department.
The Tribunal noted that pending consideration of the show cause notice for cancellation the appellant’s registration has been suspended.
A Coram consisting of Justice T.S. Sivagnanam and Justice Prasenjit Biswas viewed that suspension of a license of a dealer will be counter-productive and would work against the interest of the revenue. “If the registration of a dealer is cancelled, the dealer cannot carry on its business in the sense that no invoice can be raised by the dealer. This would ultimately impact the recovery of taxes.” Said the Tribunal.
It was further observed that summons were repeatedly issued to the appellant and the appellant has been responding to the summons by submitting representations to the department.
The Tribunal directed to revoke the suspension of the appellant’s registration with a direction to the appropriate authority to issue show cause notice within a time frame and take up the adjudication proceeding.
The appeal along with CAN 1 of 2022 as well as the writ petition was made allowed by directing the respondent authority to forthwith revoke the suspension of the appellant’s license and to issue show cause notice within seven days from thedate of receipt of the server copy of this order.
Mr Ankit Kanodia, Ms Megha Agarwal & Mr Jitesh Sah appeared for the appellant and Mr Bhaskar Prasad Banerjee, Ms Rajarshree Venkat Kundalia, Ms Ekta Sinha & Mr Tapan Bhanja and Ms Sanjukta Gupta appeared for the respondents.
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