2022 (3) TMI 793 - HC - GST

GST Registration Cancellation Overturned: Court Allows Revival for Closed Business with Conditions for Return Filing

Tvl. Alamelu Contracts Versus The Commissioner of Commercial Taxes, The Assistant Commissioner (ST) (Circle) Sivagangai Assessment Circle, Sivagangai, The Deputy State Tax Officer (ST) (Circle) Sivagangai Assessment Circle, Sivagangai

Tvl. Alamelu Contracts Versus The Commissioner of Commercial Taxes, The Assistant Commissioner (ST) (Circle) Sivagangai Assessment Circle, Sivagangai, The ... Issues:Challenge to cancellation of Goods and Services Tax Registration.Analysis:The petitioner challenged the cancellation of their GST registration, claiming they did not have any business and thus did not file returns. The petitioner argued that even if they had filed, it would have been a nil return with no prejudice to the respondents. They contended that the cancellation order was communicated electronically, and since the business was closed, they were unaware of the cancellation. The petitioner relied on a previous court decision to support their case.The respondents opposed the petition, referring to a circular that allowed appeals against registration cancellation beyond the specified period under certain conditions. They argued that the petitioner failed to file an application against the cancellation order despite being given time to do so, and therefore, no leniency should be granted under the GST Act.The judge considered both sides' arguments and noted similarities with previous cases where delays occurred in filing appeals or writ petitions against registration cancellations. Despite the delays, the judge decided to allow the writ petition, emphasizing that keeping the assessee out of the GST regime would not serve any useful purpose and would only harm revenue. The judge referred to specific conditions and safeguards stipulated in a previous order and directed the petitioner to comply with various requirements within specified timeframes.The judge highlighted the powers of the court under Article 226 of the Constitution to ensure justice and the rule of law. The detailed conditions imposed on the petitioner included filing returns for the relevant period, paying outstanding taxes with interest, restrictions on utilizing Input Tax Credit, and complying with future tax liabilities. The judge directed the respondents to make necessary changes to the GST Web portal to facilitate compliance by the petitioner within specific timelines.Ultimately, the writ petition was allowed based on the outlined directions, with no costs imposed on either party. The judgment provided a comprehensive framework for the petitioner to rectify their tax compliance issues and have their GST registration reinstated.