GST Registration Shall Not Be Cancelled For Non-Filing Of Returns If Taxpayer Is Not Found Adopting Dubious Process To Evade Tax: Calcutta High Court

While pointing out that the suspension/ revocation of license would be counterproductive and works against the interest of the revenue, the Calcutta High Court clarified that assessee in such a case would not be able to carry on his business in the sense that no invoice can be raised by the assessee and ultimately would impact recovery of tax. Single Bench of Justice Raja Basu Chowdhury therefore 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. Facts of the case: 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 shall not be cancelled for the assessee having failed to file his returns for a continuous period of six months. 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. This was opposed by the Departmental authorities by contending 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. Observation of the High Court: The Bench 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. The Bench also pointed that unless the assessee files his returns, the Department cannot determine the final liability. The Bench therefore directed the respondents/ Department to take a pragmatic view in the matter and permit the assessee to carry on his business. At the same time, the Bench 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. However, if the assessee fails to comply with the directions, the benefit of restoration of GST registration will not enure to the assessee, added the Bench. Hence, the High Court disposed of the petition while partly answering in favour of the petitioner. Counsel for the Petitioner/ Assessee: Sandip Choraria & Rishav Manna Counsel for Respondent/ Revenue: Uday Sankar Bhattacharya, Sujit Mitra, Banani Bhattacharya, Debasish Chakraborty & Soumen Bhattacharya Case Title: Pranabesh Sarkar versus Superintendent CGST & CX Case Number: WPA 14557 of 2024 Click here to read/ download the Order

GST Registration Shall Not Be Cancelled For Non-Filing Of Returns If Taxpayer Is Not Found Adopting Dubious Process To Evade Tax: Calcutta High Court

Pankaj Bajpai

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