2022 (9) TMI 1106 - HC - GST

Petition allowed; registration reinstated after State failed to appeal; file pre-cancellation returns within 45 days with taxes, interest, fines

HC allowed the petition challenging cancellation of registration, finding the State failed to appeal and effectively accepted the earlier order. ... Revocation/Restoration of cancelled GST registration - Filing of returns and payment as precondition for revival of registration - Prohibition on adjustment from Input Tax Credit for revival payments - Mandating GSTN portal modifications to enable belated filings - Executive inaction as deemed acceptance of earlier judicial orderRevocation/Restoration of cancelled GST registration - Filing of returns and payment as precondition for revival of registration - Prohibition on adjustment from Input Tax Credit for revival payments - Mandating GSTN portal modifications to enable belated filings - Executive inaction as deemed acceptance of earlier judicial order - Application of directions in paragraph 129 of the earlier order dated 31.01.2022 to the present writ petitions and restoration of registrations on stated conditions. - HELD THAT: - The Court held that, although the petitioners had largely failed to avail the statutory remedies under the Act (Section 30 or appeal within the prescribed period), the State's failure to respond or to challenge the earlier order dated 31.01.2022 and its admission that the directions in that order have been implemented in similar cases amounts to acquiescence; accordingly the directions in paragraph 129 of the earlier order are to be applied to these petitioners. Pursuant to those directions the petitioners are permitted to file outstanding returns for periods prior to cancellation and to pay the tax, interest, fine and fee within forty five days from receipt of this order; such payments cannot be made by adjusting any unutilized or unclaimed Input Tax Credit; upon uploading returns and payment of tax, interest and penalty the registration shall be revived forthwith; and the respondents are directed to instruct the GST Network to modify the GST portal architecture to permit filing of such returns and payment, the exercise to be completed within forty five days. These remedial directions were applied notwithstanding earlier non compliance with statutory timelines because of the State's inaction and implementation in other cases; the writ petitions are allowed subject to the stated conditions. [Paras 9, 10, 11]Writ petitions allowed by applying the directions in paragraph 129 of the order dated 31.01.2022: petitioners may file prior-period returns and pay tax, interest, fine/fee within 45 days (without using ITC), upon which registrations shall be revived; respondents to effect GSTN portal changes within 45 days.Final Conclusion: The writ petitions are allowed on the terms extracted from paragraph 129 of the earlier order dated 31.01.2022 (permitting belated filing of returns and payment of tax/interest/penalty without adjustment from Input Tax Credit, revival on compliance, and direction to respondents to enable portal filing), with no order as to costs and connected miscellaneous petitions closed. Issues:Challenge to cancellation of registrations under Tamil Nadu Goods and Services Tax Act, 2017 - Failure to avail opportunities under Amnesty Schemes - Remedies under Section 30 and appeal before Appellate Authority - Delay in availing remedies - Judicial review of cancellation orders - Implementation of directions from previous judgment.Analysis:The judgment addresses the challenge posed by all writ petitioners against the cancellation of their registrations under the Tamil Nadu Goods and Services Tax Act, 2017. The petitioners missed opportunities provided through Amnesty Schemes to restore their cancelled registrations. The Act offers two modes for revocation of cancellation: Section 30 remedy, which must be availed within thirty days from the cancellation order, and the appeal before the Appellate Authority, to be utilized within three months from the communication of the cancellation order. Most petitioners failed to utilize these remedies, except for a few who belatedly filed appeals accompanied by returns and admitted tax amounts.One petitioner managed to avail the appellate remedy with a significant delay, while others approached the Court directly seeking restoration. A previous judgment considered similar cases and accepted the petitioners' arguments, imposing conditions for restoration. The State's delay in responding to a communication seeking guidance on the previous order was noted, with the Court interpreting it as an acceptance of the judgment. The State confirmed implementing the directions from the previous order for all petitioners, leading to the current judgment's directions being passed, effective immediately upon receipt.The current judgment allows petitioners to file returns for the period before registration cancellation, pay defaulted taxes with interest and fines, and upon compliance, their registrations will be revived. The respondents are instructed to facilitate this process within forty-five days. The payment made for tax, penalty, etc., should not be adjusted from any unutilized Input Tax Credit. The respondents are directed to make necessary changes in the GST Web Portal to enable petitioners to file returns and make payments within the specified timeframe. Ultimately, the writ petitions are allowed with no costs, and connected miscellaneous petitions are closed.