GSTIN registration cancellation petitions allowed despite missed 90-day deadline for revenue collection benefits

The Madras HC allowed petitions challenging GSTIN registration cancellation despite statutory time limitations being exceeded. Petitioners failed to file revocation requests within the mandatory 90-day period and subsequently filed appeals and writ petitions beyond prescribed timelines. The court held that restoring registrations would benefit revenue collection for the state and serve no useful purpose to exclude assessees from GST regime since they would continue business operations regardless. The court prioritized practical considerations over strict adherence to statutory deadlines, allowing the petitions for registration restoration.

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Issues:
Petitioner seeks to quash the order cancelling GSTIN registration and restore it, citing medical reasons for non-compliance. Government Advocate argues for dismissal based on failure to file returns. Court considers revenue benefits and past precedents for relief.

Analysis:
The petitioner, a business owner, filed a Writ Petition to challenge the cancellation of their GSTIN registration due to non-filing of returns. The petitioner explained that due to health issues, specifically hernia surgery, they were unable to oversee business operations, resulting in non-compliance. The petitioner's representative had been responsible for filing returns, but during the petitioner's medical absence, returns were not filed, leading to the cancellation of registration. The petitioner's plea for revocation was rejected due to exceeding the statutory period for filing such requests.

In response, the Government Advocate highlighted the legal provision under Section 29(2) of the TNGST Act, which mandates automatic cancellation of registration if returns are not filed continuously for six months. The government issued a show cause notice before cancellation, which the petitioner failed to respond to, leading to the cancellation of registration. The Government Advocate urged for the dismissal of the writ petition based on these grounds.

The Court considered the revenue implications and previous judgments where delays were condoned in similar cases. Referring to a specific case, the Court emphasized that bringing back non-compliant taxpayers into the GST regime would benefit revenue collection. The Court decided to allow the writ petition, setting out conditions for the petitioner's compliance. These conditions included filing past returns with due payments, restrictions on utilizing Input Tax Credit, and scrutiny by tax authorities. The Court directed the authorities to facilitate the process for the petitioner to comply with the conditions within specified timelines.

In conclusion, the Court granted relief to the petitioner under specific safeguards to ensure compliance with tax obligations and prevent misuse of benefits. The judgment emphasized the importance of integrating non-compliant taxpayers back into the GST system to uphold the integrity of the tax regime and revenue collection.

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