No Intervention Under Art. 226 Is Warranted Once Taxpayer Has Not Cooperated In Proceedings Leading To Suspension Of GST Registration: Madras HC

While declining to intervene in the matter of Karmaxx Infotech (petitioner), the Madras High Court dismissed their writ petition and cited the petitioner's failure to cooperate in the assessment proceedings as a critical factor that prevented them from being entitled to any writ remedy.

A Single Judge Bench of Justice Anita Sumanth observed that “quite apart from the fact that the basis of show-cause notice is well known to the petitioner as may be seen from reply dated 29.05.2023, the petitioner has admittedly not appeared before the officer on 22.05.2023 despite receipt of the notice well in time. Thus, the petitioner has not cooperated in the proceedings leading to the suspension of registration. This is a critical aspect of the matter which militates against the petitioner's prayer for intervention under Article 226 of the Constitution of India”.

Advocate N. Murali appeared for the Petitioner, whereas Additional Government Pleader E. Ranganayaki appeared for the Respondent.

In this case, the petitioner had challenged the cancellation of their registration under the Tamil Nadu Goods and Service Tax Act, 2017, arguing that the show-cause notice lacked specific reasons, making it difficult for them to effectively respond. On the other hand, the Additional Government Pleader had argued that the petitioner had filed a detailed reply to the notice and understood its content. The notice referred to Section 29(2)(e), which allows cancellation for fraud, willful misstatement, or suppression of facts, clarifying the basis for the proposed cancellation.

After considering the submission, the Bench noted that the petitioner's unregistered premises had been inspected by the authorities even before the issuance of the notice, and therefore, the petitioner was already aware of the sequence of events leading to the notice.

The Bench further stated that the petitioner's query regarding the valuation of goods exemption was also well within their knowledge, and consequently, the submission that the show-cause notice was non-speaking and that the petitioner was unaware of the details of the proposals were deemed misconceived, as all the relevant facts were known to the petitioner.

Lastly, the High Court disagreed with the petitioner's suggestion that the mere act of filing a reply should be considered an act of grace on their part and that it should have been considered by the assessing authority. 

Cause Title: Karmaxx Infotech v. The Assistant Commissioner (ST) Harbour Assessment Circle

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