Fresh GST registration cannot be refused where conditional relief protects compliance and pending tax recovery proceedings continue independently.
Denial of fresh GST registration after cancellation was found unjustified where the taxpayer had later filed returns and sought registration again, because registration relief could be granted on conditions without impeding revenue interests. The Madras HC allowed the petitioner to continue business subject to compliance, including deposit in cash, while preserving the department's right to pursue the pending show-cause notice for levy and recovery of tax relating to the earlier period. The relief on registration was treated as independent of the ongoing assessment and recovery proceedings, which could continue unaffected.
Issues: Whether denial of fresh GST registration after cancellation was justified, and whether the petitioner could be permitted to continue business subject to compliance while the revenue was left free to proceed under the show-cause notice.
Analysis: The cancellation of registration had not been challenged within the prescribed time, but the petitioner had subsequently filed returns and a fresh application for registration. The refusal of fresh registration was held to be unjustified in the circumstances, since denial of registration would not necessarily prevent business activity and could lead to revenue leakage. The Court also noted that pending proceedings under the show-cause notice for levy and recovery of tax for the past period could continue independently, without being affected by the relief on registration.
Conclusion: The petitioner was entitled to be allowed to carry on business by either availing the notified relief or obtaining fresh registration, subject to deposit of Rs. 1,50,000/- in cash and completion of the pending proceedings.
Final Conclusion: The writ petition was disposed of by granting conditional relief on registration while preserving the respondent's to complete assessment and recovery proceedings for the past period.
Ratio Decidendi: Denial of GST registration cannot be sustained where conditional relief can secure compliance and revenue interests, and pending tax proceedings may proceed independently without affecting such registration relief.
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