The Calcutta High Court has recently quashed the cancellation of registration for non-mentioning of reply to SCN in a system generated order, while directing the assessee, Monirul Islam, to pay the entire tax due along with interests and other charges within 10 days for restoration of the canceled Goods and Services Tax (GST) Registration.
The appellant was a small time dealer who was not vigilant in filing the appeal before the appellate authority within the period of limitation. On a perusal of the order of cancellation of the registration, it is seen that the appellant had submitted his reply dated 3rd November, 2021 to the show cause notice dated 24th October, 2021. However, the same order states that no reply to show cause notice has been submitted.
The Government Counsels submitted that the mistake occurred as it was a system-generated order.
It was also submitted that, at present the appellant is ready and willing to remit the taxes along with the interest for belated payment and prays that the registration may be restored.
It was also noted by the bench that, “the appellant had the benefit of registration from 2017 onwards and the appellant admits that he could not remit the tax and that he is a small time dealer and due to financial constraints, could not remit the taxes.”
The Division Bench of Justices T S Sivagnanam and Hiranmay Bhattacharya observed, “In any event, whether it is an order passed by an authority in the physical form or an auto generated order, there should be application of mind.”
It was also distinguished that, “there has been no proper application of mind on the part of the authority while canceling the registration.”
Considering the peculiar facts and circumstances, the Calcutta High Court went on to grant reliefs to the appellant. Resultantly, the appeal was allowed, along with the condonation of delay.
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