GST registration cannot be cancelled if enterprise not carried out from premises on account of Covid 19 norms, protocols: Calcutta HC

The Calcutta High Court has dominated that items and repair tax registration can’t be cancelled if enterprise was not carried out from the premises, because of the nationwide Covid pandemic.

The order was issued in case of an enchantment filed by International Value Retail in opposition to income division and GST authorities, the place the latter had issued a present trigger discover and adjudication order cancelling the corporate’s registration for not finishing up its companies from official premises however from dwelling, in November 2020.

“…solely on account of extraordinary compelling circumstances of Covid-19 and in following the protocol and norms of Covid-19 quickly petitioner was not carrying his enterprise from the premises in query from formally registered premises and so they have been carrying enterprise in query from dwelling,” Justice Md. Nizamuddin stated within the order handed final month, which was launched on Monday.

“Contemplating this reality of the case I’m inclined to put aside the impugned order dated ninth November, 2020 by which the respondent involved has rejected the petitioner’s software for revocation of cancellation of its GST registration,” the order acknowledged. ET has seen a duplicate of the order.

The Court docket additionally directed income authorities to think about afresh the corporate’s software for revocation of cancellation of its registration below GST Act in accordance with legislation.

The Court docket additional directed the authorities to cross a ‘reasoned and talking order’ after listening to the petitioner or a licensed consultant, inside 4 weeks and to think about the paperwork to be positioned by them on the time of listening to.

Through the first wave of the Covid 19 pandemic, the nation went right into a nationwide lockdown from March-end until June, and phased opening was adopted over the next months. Through the time, many companies opted for ‘earn a living from home’ coverage for his or her workers, at the same time as enterprise exercise from registered premises got here to a grinding halt, albeit quickly.

Consultants stated that the judgement would come as a aid to firms which may be going through related conditions, as such cancellations weren’t justified given the circumstances that companies confronted in the course of the pandemic.

“Departmental officers are duty-bound to look at the bottom realities earlier than bringing the companies to a halt, else it is going to be a regressive step for the Indian entrepreneurs,” stated Rajat Mohan, senior companion at AMRG Associates.

The order will even come to assistance from taxpayers who haven’t been capable of file returns or declare enter tax credit score, due to cancellation of registration on account of enterprise not being carried out from the registered premises, stated Sandeep Sehgal, director- tax and regulatory at tax consulting agency AKM International.

“This can be a welcome judgement that the registration can’t be cancelled when workers aren’t current on the registered office because of the pandemic-like scenario,” he added.