Allahabad HC imposes Penalty on GST Dept. for Unnecessary Harassment for Copy of Electricity Bill for granting GST Registration
Fact and Issue of the case
The brief facts of the case are that the petitioner is engaged in the business of providing employment through consultancy, which fall within the purview of U.P. Goods & Service Tax Act (hereinafter referred to as, ‘the Act‘). On 17.08.2021, the petitioner applied for grant of registration under the Act through online mode. On submission of the application, an inspection was made at the business premises of the petitioner on 15.09.2021 and thereafter, notice was issued for providing certain information and documents in support thereof. On submission of reply, by means of the impugned order dated 23.09.2021, the application of the petitioner was rejected, against which the petitioner preferred an appeal before the respondent no. 3, which too has been dismissed vide order dated 28.10.2021. Hence, this petition.
Observation of the Court
After hearing the learned counsel for the parties, the Court has perused the record. For deciding the controversy involved in the present writ petition, section 25 and rules 8 & 9 will be relevant. A perusal of the sub-section (6) of section 25 of the Act clearly reveals that for registration, only PAN card and Adhar card are required to be furnished. Section 25 provides detailed procedure to be followed by every person applying for registration. It further requires by the person to provide PAN and Aadhar details. Rule 8 and 9 provides how the application for registration has to be dealt with. Further Rule 9 suggests the manner in which verification has to be done. If on examination of the application accompanying the documents all found to be in order then approval should be granted within seven working days. In the event the officer is not satisfied with the documents annexed then inspection is provided and further clarification can be sought.
A perusal of the notice shows that the petitioner was required to submit recent electricity bill or house tax receipt. The petitioner submitted replyalong with requisite document but the application of the petitioner for grant of registration certificate was rejected vide order dated 23.9.2021.
On perusal of the show cause notice, rejection order and the appellate order, it appears that firstly clarification with regard to the possession of business premisses was required to be specified and secondly submission of electricity bill / house tax receipt was required. The petitioner has submitted the explanation with regard to the nature or possession of the business premisses as the owner and also submitted the house tax receipt in compliance with the show cause notice. But the authorities below without whispering any word or assigning any reason had rejected the application for non-specifying possession of the business premisses and insisted for submission of electricity bill. The authorities below have further erred in law in not pointing out any defect in submission of house tax receipt and insisted for submission of electricity bill whereas the notice dated 15.9.2021 gave an option for submission of recent electricity bill or house tax receipt. Further the petitioner has explained that the property, in which the business is being undertaken, is under the ownership of the petitioner. So the other grounds also falls for non specifying the nature or possession of the property. Further in the grounds of appeal, it has specifically been mentioned that the petitioner’s place of business is under ownership of the sole proprietor. Once the fact which has not only been mentioned in the in the reply to the show cause notice given in the application filed for grant of registration but also in the grounds of appeal, it was bounded duty of the authorities to look into the same and then pass the order in accordance with law instead of their own whims and fancies. Once the petitioner has satisfied the requirement of the law for providing PAN, Aadhar and also house tax receipt / property receipt then the authority should not have insisted for submission of receipt of electricity bill. In the absence of any short comings or defect being pointed out in the reply submitted along with documents, the petitioner has every right to carry on her business lawfully and her right to do business cannot be confiscated in illegal and arbitrary manner.
It is clear from the records that all the documents as required under the Act and law as well as in compliance to the show cause notice were furnished by the petitioner and without pointing out any defect or short coming therein, the application should not have been rejected.
Before parting with the judgement, the Court is constraint to observe that the two authorities of the State have acted only with a view to harass the petitioner which cannot be accepted at any cost. This attitude of the respondents in this petition cannot be tolerated as the officers are being State functionary has to act fairly and their action must be in consonance with the provisions of the Acts as well as Rules.
In view of the foregoing discussions, the impugned orders dated 23.09.2021 and 28.10.2021 cannot be sustained in the eyes of law. The impugned orders dated 23.09.2021 and 28.10.2021 are hereby quashed. The respondents are directed to pass an appropriate order on the material available on record within a period of seven working days from the date of receipt of a copy of this order
Conclusion
The court ruled in afvour of the petitioner and imposed a penalty of Rs. 15,000 on the GST department /-, which shall be deposited before the High Court State Legal Services Committee, Allahabad within a period of 20 days from today.
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