2024 (3) TMI 748 - HC - GST

GST Registration Restored: Conditional Appeal Granted with Compliance Mandate Under Specific Tax Regulations

HC allowed appeal challenging GST registration cancellation. Despite initial time-barred appeal rejection, Court granted conditional restoration of ... Cancellation of GST registration of petitioner - time limitation - petitioner states that an appeal was filed against such cancellation order but that such appeal was rejected as being time barred - HELD THAT:- The appellate authority cannot be faulted for rejecting the appeal in view of the language of Section 107 of the Central Goods and Services Tax Act, 2017. At the same time, the petitioner should not be left without remedy. The reasons set out in the order of cancellation is non filing of returns for a continuous period of more than six months. In Suguna Cutpiece v. The Appellate Deputy Commissioner (ST)(GST) and others, [2022 (2) TMI 933 - MADRAS HIGH COURT], this Court directed restoration of registration subject to certain conditions. In the over all facts and circumstances, the petitioner is entitled to an order on similar lines. The petitioner is directed to file returns for the period prior to the cancellation of registration, together with tax dues along with interest thereon and the fee fixed for belated filing of returns within a period of forty five (45) days from the date of receipt of a copy of this order - Petition disposed off. Issues involved: Appeal against cancellation of GST registration, rejection of appeal as time-barred, restoration of registration.The petitioner challenged an appellate order rejecting the appeal against the cancellation of their GST registration. The petitioner received a show cause notice asking why the registration should not be cancelled, to which they responded stating no business activity for eleven months with nil returns filed. Subsequently, the cancellation order was issued, and the appeal against it was rejected as time-barred.The petitioner contended that due to the rejection of the appeal, they had no remedy except to approach the High Court. The counsel relied on a previous order of the Court in related matters. On the other hand, the senior standing counsel for the respondents highlighted that the appeal was filed after the condonable delay period and raised concerns about the unclear filing of returns up to the cancellation date.The Court noted that the appellate authority rightfully rejected the appeal based on the provisions of Section 107 of the Central Goods and Services Tax Act, 2017. However, recognizing the need to provide a remedy, the Court referred to a previous case directing restoration of registration under certain conditions. Considering the circumstances, the petitioner was granted similar relief.The Court disposed of the writ petition with specific directions for the petitioner, including filing returns for the period before cancellation, payment of tax dues with interest and fees within 45 days, and restrictions on utilizing unclaimed Input Tax Credit. The approval of Input Tax Credit for future use was emphasized, along with the requirement to pay GST and file correct value of supplies for subsequent periods.The restoration of GST registration was made conditional upon fulfilling the prescribed conditions. The Court ordered suitable changes in the GST Web portal to facilitate compliance by the petitioner within a specified timeframe. The case was closed with no costs awarded.