LANDMARK JUDGEMENT BY ALLAHABAD HIGH COURT,PANELTY IMPOSED ON GST OFFICER
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LANDMARK JUDGEMENT BY ALLAHABAD HIGH COURT,PANELTY IMPOSED ON GST OFFICER
11/12/2020
The present petition has been filed alleging that the petitioner is a proprietorship firm and was registered for providing constructions services vide GSTIN No. 09AAGPQ9159G125.
The petitioner was served show cause notice dated 21.11.2019 by the respondent proposing to cancel the registration certificate of the petitioner mainly on the ground that the petitioner has failed to file the return for a continuous period of six months. In pursuance of the said notice, an ex-parte order was passed on 30.11.2019 cancelling the registration of the petitioner by invoking the powers under Section 29(2)(5) of Uttar Pradesh Goods and Services Tax, 2017 .
The petitioner filed an application on 19.12.2019 under Section 13 of U.P. GST Act 2017 for revocation of cancellation of registration on the ground that the petitioner had submitted all the pending returns under GSTR-3B and GSTR-1 and, thus, the entire tax liability stood clear with the late fees.
In response to the application filed by the petitioner on 19.12.2019, the respondent issued a show cause notice on 29.12.2019 calling upon the petitioner to show cause on the following reasons failing which the application of the petitioner shall be decided on ex-parte on the basis of the available records on merits.
The show cause notice was completely vague and did not even point out as to what ground the reply was proposed to be sought, the petitioner appeared and apprised that all the returns have already been filed, however, despite the petitioner having replied, the respondent no. 2, vide order dated 30.1.2020, rejected the application for revocation of registration recording as under:
“the tax payer has simply stated that interest has been paid without providing any details as to amount or details of Challan/DRC-03.”
Aggrieved against the said order, the petitioner preferred an appeal before the appellate authority, the respondent no. 1 which was registered as Appeal No. 86/2019-20. In the memo of appeal, which is on record, it was specifically pleaded that the application for revocation of cancellation of registration has been wrongly rejected despite of the Challan present on the portal, along with the said appeal, the petitioner once again filed all the requisite documents evidencing the filing of returns as well as the tax and late fees.
The Appellate Authority, vide its order dated 06.07.2020, dismissed the appeal and affirmed the order dated 30.1.2020 and relied upon mail issued by a division office dated 21.5.2020 to the effect that tax payer did not upload any documents online while replying to the query and as the petitioner had simply stated that all the liabilities have been cleared by them even they have not disclosed as to on what date they filed return and did not enclose the copy filed by them and the tax payer simply made claims without producing proper evidence which cannot be verified by the division office at this stage.
After hearing both the parties honourable judje I am sorry to record that the appellate authority has also committed the same manifest arbitrariness in deciding the appeal, the recording of the reason that facts cannot be verified at the appellate level is wholly arbitrary and militates against the whole purpose of statutory appeal under an enactment.
Considering the fact that now the Department has accepted that the returns were filed within time and no dues remain payable, the order dated 30.11.2019 as well as the appellate order dated 06.07.2020 deserves to be set aside with a direction to allow the application for revocation of registration filed by the petitioner.
Consequently, the order cancelling the registration stands revoked from the date of filing of the application before the respondent no. 2.
In view of the specific findings recorded above to the effect that the petitioner was unnecessarily harassed, the writ petition is allowed with a cost of Rs. 10,000/- to be paid to the petitioner within 30 days by the respondent no. 2 from his own salary.