Writ remedy not available if assessee defaults in compliance with law and non-cooperation in proceeding

[CA Bimal Jain]

The Hon’ble Madras High Court in KARMAXX INFOTECH REP. BY ITS PROPRIETOR, MOHAMMED SALEM VERSUS THE ASSISTANT COMMISSIONER (ST) HARBOUR ASSESSMENT CIRCLE, CHENNAI  - 2023 (6) TMI 1232 - MADRAS HIGH COURT  dismissed the writ filed by the assessee against the order of cancellation of GST registration and held writ remedy cannot be granted to assessee who defaulted in compliance with provisions of GST law and has not cooperated in departmental proceedings.

Facts:

M/s Karmaxx Infotech (“the Petitioner”) had changed his principal place of business but has not updated on the GST common portal. The Revenue Department (“the Respondent”) conducted an inspection at the old premises of the Petitioner and found that place abandoned. Subsequently, the Respondent issued a notice (“the Notice”) by referring to section 29(2)(e) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), which provides for the cancellation of registration obtained by means of fraud / wilful misstatement/suppression of facts.

The Petitioner filed the reply manually on May 29, 2023.

The Adjudicating Authority vide an order dated June 07, 2023 (“the Impugned Order”) rejected the reply to the Notice and passed an order of cancellation of GST registration.

Aggrieved by the Impugned order, the Petitioner filed a writ before the Hon’ble Madras High Court for revocation of cancellation of GST registration on the ground that the Notice was non-speaking and has merely section 29(2)(e) of the CGST Act.

Held:

The Hon’ble High Court of Madras in KARMAXX INFOTECH REP. BY ITS PROPRIETOR, MOHAMMED SALEM VERSUS THE ASSISTANT COMMISSIONER (ST) HARBOUR ASSESSMENT CIRCLE, CHENNAI  - 2023 (6) TMI 1232 - MADRAS HIGH COURT  held as under:

• Noted that, the default of non-intimation of change of place of business to the department was well within the knowledge of the Petitioner before the issuance of the Notice, therefore such a notice cannot be held to be non-speaking.
• Held that, the above facts of default on the part of the Petitioner, along with non-cooperation with departmental proceedings, make the case unfit for grant of remedy under Article 226 of the Constitution of India.

Our Comments:

Default on the part of Petitioner, together with non-cooperation with departmental proceedings show lag on the part of Petitioner resulting in loss of the right to claim a suitable remedy under Article 226 of the Constitution of India.

(Author can be reached at info@a2ztaxcorp.com)