In the matter of M/s. Galaxy Bar and Restaurant, Nayagarh Versus State of Odisha and others the division bench of Orissa High Court comprises Chief S. Muralidhar and Justice G. Satapathy held that application for a licence should not be rejected even if the GST return of the person should not be filed. 

The Court further added that it is unrealistic to expect that to happen without the actual commencement of its business.

Further, the Court observed that unless the person was issued a licence and in the capacity to commence its business, the question to file the GST would not arise. 

Case Brief:

In the said matter, last year, the Petitioner filed an application for the restaurant's ON Shop license. When the inspector submitted the report Sadar, Nayagarh to the Superintendent of Excise, Nayagarh, stating that none of the objections was valid.

Objections were also received from the Chairperson of the Nayagarh Municipality. The Superintendent of Excise, on June 6, 2022, made a recommendation to the Collector, Nayagarh, that the petitioner’s application should be granted.

Later, in the month of July, the Commissioner of Excise launched another high-level joint inquiry and all the inquiries went in favour of the petitioner, with the Excise Deputy Commissioner informing the Department that the building in which the restaurant was being run in a commercial area.

Later, on January 24, 2023, another inquiry was raised to determine if the petitioner was registered under the GST Act and if its returns thereunder were filed. Thereafter, the Petitioner submitted an application in the Court itself showing 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.

It is unreasonable to anticipate GST return filing prior to the petitioner actually starting its business; an application should not be turned down solely because a GST return has not been filed yet., said Court.