Unrealistic To Expect GST Return Filing Without Actual Commencement Of Business: Orissa High Court Directs Dept. To Process Licence Application

The Orissa High Court has held that the license application should not be rejected only because a GST return has not been filed yet, since it is unrealistic to expect that to happen without the actual commencement of its business.

The division bench of Chief S. Muralidhar and Justice G. Satapathy has observed that unless the petitioner is issued a license and is able to commence its business, the question of filing a GST return would not arise.

The petitioner filed an application for the restaurant's ON Shop license way back on April 5, 2022. The petitioner responded to various queries and also provided clarifications. It was followed by an inquiry into the objections raised. The Inspector of Excise, Sadar, Nayagarh submitted a report on June 4, 2022, to the Superintendent of Excise, Nayagarh, stating that none of the objections were valid. It included the objections received from the Chairperson of the Nayagarh Municipality. The Superintendent of Excise, on June 6, 2022, made a recommendation to the Collector, Nayagarh, that the petitioner’s application should be granted.

However, another high-level joint inquiry was launched by the Commissioner of Excise on July 13, 2022, and yet another inquiry was held on November 5, 2022. All the inquiries went in favor of the petitioner, with the Excise Deputy Commissioner informing the Department that the building in which the restaurant was being run is in a commercial area.

On January 24, 2023, yet another inquiry was ordered to determine if the petitioner was registered under the GST Act and if its returns thereunder were filed.

The petitioner drew the attention of the court to the application submitted by the petitioner, which itself showed that a copy of the GST registration certificate has been enclosed. The issue of filing a GST return would not come up unless the petitioner is granted a license and is able to start their business.

The court held that it is unreasonable to anticipate GST return filing prior to the petitioner actually starting its business; an application should not be turned down solely because a GST return has not been filed yet.

Case Title: M/s. Galaxy Bar and Restaurant, Nayagarh Versus State of Odisha and others

Case No: W.P.(C) No.6916 of 2023

Citation: 2023 LiveLaw (Ori) 39

Date: 10.03.2023

Counsel For Petitioner: R.P. Kar

Counsel For Respondent: Debakanta Mohanty

Click Here To Read The Order