A business that is yet to commence cannot be expected to have filed GST returns and license application cannot be rejected : Orissa High Court

A business that is yet to commence cannot be expected to have filed GST returns and license application cannot be rejected : Orissa High Court

The Orissa High Court by its division Bench comprising of Chief Justice Dr. S. Muralidhar and Justice G. Satapathy while adjudicating a writ petition against the non-granting of license for an IMFL Restaurant ON shop specifically ruled that a business that is yet to commence cannot be expected to have filled GST returns and license applications should not be rejected only on this basis.

The background of the case was that the Petitioner- Galaxy Bar and Restaurant at Nayagarh had filed writ petition before the High Court because they were aggrieved by the non-grant of license for an IMFL Restaurant ON Shop and sought directions to the opposite parties for the grant of the same.

The bench noted that the Petitioner had filed for the Restaurant ON Shop licence on 5th April 2022.

The petitioner stated that they responded to various queries and provided clarifications as well, then enquiry also took place where objections had been raised and the Inspector of Excise submitted their report accordingly. According to this the Superintendent of Excise made a recommendation to the Collector, Nayagarh that the Petitioner’s application should be granted.

However, different high-level joint inquiry was launched by the Commissioner of Excise and they went in favor of the Petitioner the Excise Deputy Commissioner informed the department that the restaurant was running in a commercial area.

Another inquiry was ordered on 24th January 2023 to determine if the petitioner was registered under the Goods and Services Tax Act (GST) and if returns were filed thereunder.

Furthermore, the Petitioner attracted Court’s attention to the application submitted by the petitioner, which itself showed that a copy of the GST registration certificate has been enclosed. The issue of filing a GST return would not come up unless the petitioner is granted a license and is able to start their business.

Further, the bench observed that nothing adverse was found with regards to the Petitioner’s application for an ON shop license and with the petitioner having a GST registration certificate and it was specifically clarified that such applications should not be rejected only on the basis of a GST return not being filed yet since it was unrealistic to expect that to happen without the Petitioner actually commencing its business.