Tripura HC: Authority to Re-open Petitioner Account on the GST Portal

Court Ordered to Unblock GST Account

The Tripura High Court passed the judgment in favour of the taxpayer in a tussle between taxpayer and tax authority. The court ordered the tax authority to unblock the GST account of the petitioner/ on the official portal of GST. The petitioner is a sole proprietor and is in the business of purchase and sale of consumables and other taxable goods. Consequently, the petitioner enjoys registration under the State as well as Central GST Acts.

The Crux of the Issue

On 16th December 2020, the Superintendent of Taxes issued a show-cause notice to the sole proprietor/petitioner for cancellation of his registration. Thereafter, The petitioner did not reply to the aforesaid show-cause notice with a deadline of 7 days that were permitted; however, he replied to show-cause notice on or around 1st January 2021. Till the above-mentioned date, the Superintendent of Taxes did not pass any order in connection with the above show-cause notice. However, the petitioner found that his GST account was blocked on the GST web portal. The senior counsel for the Government Mr. P K Dhar submitted that the petitioner had substantial dues of the department which has not been paid despite serving notices.

The division bench headed by Chief Justice Akil Kureshi, Justices S.G. Chattopadhyay said that Whatever be the tax demand of the department against the petitioner, the action that is challenged cannot survive the test of law. The impugned notice was issued just for cancellation of registration and that too without specifying any particular reason. The reason that was stated was picked up from the statute itself — non-compliance of any specified provisions of the GST Act or the Rules made thereunder. The bench said that without pinpointing which provisions of the Act or the Rules and in what manner the petitioner has approached, granting a hearing to the petitioner would be an empty formality.

“Under the circumstances, impugned show cause notice dated 16th December 2020 is quashed on the ground of being vague and imprecise. Further, the respondents are directed to unblock the petitioner’s GST account on its official portal. This is without prejudice to the steps that the department makes to recover its dues in accordance with law or to breach any of the requirements under the law as the rules and regulations permit,” the court said.