GST Registration Restored: Petitioner Must File Returns, Clear Outstanding Dues, and Comply with Tax Compliance Conditions

HC allowed the writ petition challenging GST registration certificate cancellation. The court directed the petitioner to file pending returns, pay outstanding taxes, interest, and fees within a specified timeframe. The petitioner must pay subsequent GST in cash and obtain approval for Input Tax Credit utilization, following precedent set in similar cases.

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Issues:
Challenge of registration certificate cancellation due to failure to file Goods and Services Tax monthly returns.

Analysis:
The Writ Petition challenges the cancellation of the Registration Certificate based on the Petitioner's failure to file Goods and Services Tax monthly returns. The Petitioner, a Proprietor, failed to file returns from June 2019 to August 2021, leading to a show cause notice for non-compliance. Subsequently, the Petitioner paid dues for the mentioned period but was unable to pay taxes from September 2021 until the registration was canceled on 05.09.2019, effective from 31.03.2018. An appeal against the cancellation was rejected by the appellate authority due to being beyond the limitation period.

In similar circumstances, the Court in a previous case issued directions for petitioners to file returns, pay outstanding taxes, interest, fines, and fees within a specified period. The Court emphasized that such payments should not be made from unutilized Input Tax Credit and that any utilized credit must be approved by the appropriate authority. The Court also mandated the payment of GST in cash for subsequent periods and scrutinizing any earned Input Tax Credit before utilization. The respondents were granted authority to impose restrictions to prevent misuse of Input Tax Credit.

Given the consistent application of these directions in previous cases and the acceptance of this approach by the Revenue Department, the Court decided to extend the same benefits to the Petitioner in this case. Consequently, the Court ordered the Writ Petition on the terms specified in the earlier case, without imposing any costs on the Petitioner.

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