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2021 (12) TMI 1097 - HC - Indian LawsCancellation of contract for providing healthcare, kitchen and dietary services - petitioners have been blacklisted for a period of two years - HELD THAT:- Given the facts of the case, the explanation advanced by the petitioner for being unaware that its GST registration had been cancelled, does not inspire confidence. In these circumstances, keeping in view the manner in which the petitioner secured the contract with the respondent, while there are no infirmity in the respondent’s decision to terminate its contract with the petitioner, it is found that respondent’s decision to blacklist the petitioner for a period of two years wholly unwarranted. For one, it is a well-known fact that the economy has suffered a major setback ever since the onset of the COVID-19 pandemic and small business, such as the petitioner, are bearing the brunt of this. There are no reason to doubt the petitioner’s explanation for the financial difficulties that occasioned the default in paying returns and eventually led to the suspension and cancellation of its GST registration. Small proprietorships, such as the petitioner’s, are already flailing in this economy and finding it hard to survive and the respondent, being a State, cannot be blind to this reality. Permitting a punitive action of this nature to continue would deal a greater blow to the survival of small businesses such as the petitioner. After all, as the petitioner has rightly contended, at the time when the impugned order was passed, the entire basis for the respondent’s grievance with the petitioner – that the GST Department had cancelled its registration – stood resolved under the directions of the learned Appellate Authority. The respondent ought to re-consider the decision to blacklist the petitioner and, while doing so, duly take into account the significant fact that the GST Department has itself adopted a compassionate view towards the prevailing circumstances and the strata to which the petitioner and its sole proprietor belong - the impugned order is set aside to the extent that it blacklists the petitioner for a period of two years. The respondent shall reconsider this aspect, by taking into consideration the observations made by this Court today. Petition disposed off.
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