GST registration cancelled for six months' non-filing of returns; s.29 upheld despite s.50 interest demand; writ dismissed.

Cancellation of GST registration for continuous non-filing of returns was challenged on the premise that cancellation could not be ordered when tax with interest under s.50 CGST Act could be demanded. The HC held that s.50 (interest for delayed payment) and s.29 (cancellation for six months' continuous non-filing of returns) operate in distinct fields and are not contradictory; failure to file returns for six consecutive months statutorily attracts cancellation. The HC further held that the statutory appellate remedy against cancellation had to be pursued within the prescribed period and writ jurisdiction was not warranted where no jurisdictional error was shown. The cancellation was upheld and the writ petition was dismissed, with liberty to seek fresh registration.

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Issues involved: Impugning Exhibit P3 order of cancellation of GST registration due to non-filing of returns, seeking reliefs through writ petition, interpretation of Sections 29 and 50 of the GST Act, 2017, restoration of registration after filing returns and paying tax with interest.

Issue 1: Cancellation of GST registration

The petitioner, a registered dealer under the GST Act, 2017, failed to upload returns in form 3B for a period of nine months, leading to a show cause notice and eventual cancellation of registration. The cancellation was based on the authority's power under Section 29 of the GST Act, 2017, which allows for cancellation if returns are not filed continuously for six months. The petitioner did not respond to the show cause notice nor filed a return, resulting in the cancellation of registration with effect from a specified date.

Issue 2: Relief sought through writ petition

The writ petition sought the quashing of the Exhibit P3 order cancelling registration, removal of conditions hindering return uploads, and keeping the GST site open for trading activities. However, the court found no error in the authority's decision to cancel registration due to non-compliance with filing returns for the statutory period. The court emphasized the availability of an appeal remedy within three months of the cancellation order, which the petitioner did not utilize.

Issue 3: Restoration of registration after filing returns and paying tax with interest

The petitioner argued that filing returns and paying tax with interest post-cancellation should lead to restoration of registration. However, the court clarified that the provisions for cancellation of registration and payment of tax with interest serve different purposes and do not contradict each other. The court upheld the cancellation of registration due to the petitioner's failure to comply with return filing requirements for six consecutive months.

Conclusion:

The court dismissed the writ petition, stating that the authority's decision to cancel registration was lawful. The petitioner was advised to apply for fresh registration if desired, with assurance of expedited consideration. The court rejected the petitioner's claim that the GST software was not compliant with the law, noting that the portal's functionality was consistent with national tax filing practices.

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