GST registration cancellation for filing nil returns held invalid without statutory ground under Section 29(2)

The AP HC allowed a petition challenging GST registration cancellation. The registration was cancelled on grounds that the petitioner filed nil returns continuously for more than six months. The court held that Section 29(2) of the GST Act does not contain any such ground for cancellation, nor do the Rules provide for this ground. Since the respondents did not allege that the nil returns were filed incorrectly or in contravention of GST provisions, the cancellation order was without jurisdiction and lacked valid statutory ground, making it unsustainable.

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Issues involved:
The issues involved in the judgment are the cancellation of registration of GST, discrepancies in the impugned order, validity of grounds for cancellation, jurisdiction of the appellate authority, and the legality of the orders.

Cancellation of Registration of GST:
The petitioner's registration of GST was cancelled on the ground of filing nil returns continuously for more than six months. The appeal against the cancellation was dismissed due to being filed beyond the condonable delay period. The petitioner challenged these orders in a writ petition.

Discrepancies in the Impugned Order:
The impugned order mentioned a reply dated 04.02.2022 from the petitioner, even though the petitioner did not file any response to the show cause notice. The Government Pleader acknowledged that it was a clerical mistake in the order. The cancellation order did not assign any reason for the cancellation, which was a point of contention.

Validity of Grounds for Cancellation:
The petitioner argued that the ground for cancellation, "filing nil returns continuously for more than 6 months," did not fall under any clauses of the Goods and Services Tax Act or the GST Rules. Section 29 of the GST Act and Rule 22 of the GST Rules were examined to determine the validity of the grounds for cancellation.

Jurisdiction of the Appellate Authority:
The Government Pleader contended that the appeal was rightly dismissed due to being filed beyond the condonable delay period. However, the court found that since the initial order of cancellation was without jurisdiction, the appellate order dismissing the appeal could not be sustained.

Legality of the Orders:
The court held that the impugned order of cancellation was without jurisdiction and lacked any valid statutory ground. Therefore, the orders were set aside, with liberty granted to the respondents to initiate fresh proceedings if required by law. The writ petition was allowed with no orders as to costs, and any pending miscellaneous petitions were closed as a result.

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