Legal Rights Post-GST Registration Cancellation

Introduction:

In the case of Chettiar Stores v. Deputy State Tax Officer [W.P. No. 6319 of 2024 dated March 13, 2024], the Hon’ble Madras High Court addressed the cancellation of GST registration and the necessity of providing a personal hearing to the Assessee despite their alleged non-access to the GST portal.

Facts of the Case:

Chettiar Stores, engaged in the retail and wholesale trading of cereals, had their GST registration cancelled effective April 1, 2020. The Assessee claimed they did not access the GST portal and were unfamiliar with computer usage. Following a Show Cause Notice dated July 6, 2023, an Order was issued on August 22, 2023, cancelling the registration.

The Assessee contended that they were not provided with necessary notices and were willing to remit 10% of the disputed tax demand for reconsideration. The Deputy State Tax Officer argued that multiple opportunities were extended to the Assessee post-cancellation.

Issue:

Whether the Assessee must be granted an opportunity of a personal hearing even if they did not check the GST portal after the cancellation of their GST registration.

Held:

The Hon’ble Madras High Court directed that upon receipt of the Assessee’s reply and satisfaction of remittance of 10% of the disputed tax demand, the Deputy State Tax Officer must provide a reasonable opportunity to the Assessee, including a personal hearing. A fresh assessment order was mandated to be issued within two months.

The Court emphasized that despite the Assessee’s failure to monitor the GST portal, they were entitled to contest the tax demand. Consequently, the earlier cancellation order was quashed on the condition of remittance and timely reply to the Show Cause Notice, thereby disposing of the writ petition