Madras High Court Quashes Non-Speaking Order Cancelling GST Registration

The Madras High Court has quashed the order canceling GST registration without referring to the reason for the non-filing GSTR-3B return.

The single bench of Justice M. Sundar has remitted the matter back to the appellate authority with a directive to examine the matter on the merits based on available records and based on the opportunity already given to the writ petitioner/assessee under sub-section (8) of Section 107 of the CGST Act.

The writ petitioner/assessee is in the business of providing work contract services, civil works, ground leveling, and cleaning services. It was availing of input tax credits (ITC) and using them to pay its tax liability.

The writ petitioner could not file GSTR-3B for the period of 10 months and, therefore, could not pay the applicable tax liability. The AO issued a notice alleging non-filing of returns GSTR-3B and not meeting the tax liability. The assessee did not send any reply. So, AO resorted to the "best judgment" assessment and made an ex parte order for the period of 10 months.

The assessee assailed the order primarily on the ground that the returns could not be filed for the ten-month period owing to the coronavirus pandemic and consequent lockdown.

The department contended that the appellate authority has in fact gone into the facts and sustained the best judgment method that has been resorted to by the jurisdictional AO.

The court held that the Appellate Authority need not give the opportunity of being heard to the assessee again as it has already been given, it is the discretion of the Appellate Authority. All that the Appellate Authority has to do is articulate the dispositive reasoning aspect of the matter. It is open to the Appellate Authority to articulate other reasons, i.e., dispositive reasoning of other facets of the matter.

Case Title: M/s. Raj Kishore Engineering Construction (P) Ltd. Versus The Joint Commissioner (Appeals) II

Citation: 2022 LiveLaw (Mad) 510

Case No: W.P.No.32740 of 2022 and W.M.P.No.32128 of 2022 in W.P.No.32740 of 2022

Date: 06.12.2022

Counsel For Petitioner: Advocate J.V.Niranjan

Counsel For Respondent: Senior Standing Counsel Umesh Rao K

Click Here To Read Order