The Allahabad High Court ruled that GST authorities cannot blindly follow directions of TTZ Authorities.
Facts
The instant Writ Tax is being entertained by the Court in view of the fact that G.S.T. Tribunal is not functional in the State of Uttar Pradesh pursuant to the Gazette notification of the Central Government.
Smt. Vidya Devi is the proprietor of the petitioner firm carrying the business of purchase and sale of coal on retail basis for which the GSTIN was granted.
Since the petitioner’s turnover was below Rs. 50 lacs, it opted for compounding scheme under Section 9(1) of U.P.G.S.T Act as provided under Section 10 of the said Act.
On 24.09.2022, a show cause notice was issued by the respondent no.2 to the petitioner proposing to cancel the registration of the petitioner for the reason assigned therein with the direction of the TTZ authority and written direction by JC (SIB) B Agra for cancellation of registration of all coal depot.
Being dissatisfied with the reply of the petitioner, the registration of the petitioner was cancelled vide impugned order dated 14.10.2022 with effect from 18.8.2022.
Submissions
Senior Counsel for the petitioner submitted that the petitioner has not violated any provision of GST Act; more precisely, contained in Section 29 read with Rule 21 of UPGST Act and Rules framed therein.
ACSC supported the impugned order and submitted that the petitioner is not entitled for any relief from the Court as the petitioner did not adhere to the directions issued from time to time under the Environment (Protection) Act as well as TTZ authorities constituted in pursuance of the N.C. Mehta case.
Decision
The single judge bench of Justice Piyush Agrawal noted that it is not in dispute that the TTZ authorities have been constituted by Ministry of Environment and Forest, Government of India in exercise of power conferred by sub-clause 1 & 3 of Section 3 of Environment (Protection) Act, 1986, which is known as the Taj Trapaezium Zone Pollution (Prevention and Control) Authority. In exercise of power under Sections 5 & 24 of the said Act, the direction can be issued in the interest of protecting the environment.
The court said that for the protection of the environment, a direction can be issued to officer or any authority and they shall be bound by the said direction in respect of industry only.
The court observed that the petitioner is the coal trader and from his business activities does not emanate any hazardous thing which is bad for the environment.
The bench further observed that any direction given by the TTZ Authorities for cancellation of registration has to be in accordance with Section 29 read with rule 21 of GST Act and Rules therein. The GST authorities cannot blindly follow the said direction of TTZ Authorities.
“It is a matter of common knowledge that under the GST Act, A/c book are to be maintained by every person. There is no finding at any stage to show that A/c book were not maintained by the petitioner. In absence of such finding, no violation of section/rule of UPGST Act/UPGST Rule can be made out against the petitioner”, the Court Said.
Case title: M/S Vidya Coal Depot Versus Additional Commissioner Grade (Appeal) Ii And Another
Citation: Writ Tax No. – 394 of 2023
