2024 (6) TMI 664 - HC - GST

GST Registration Restored: Non-Compliant Taxpayer Granted Four Weeks to File Returns and Clear Outstanding Dues

HC allowed restoration of GST registration after non-filing of returns. Court directed petitioner to file pending returns and pay requisite taxes, ... Cancellation of GST registration for non-filing of returns - Discretionary relief where no tax-evasion is shown - Restoration of registration subject to filing of returns and payment of tax, interest, fine and penalty - Time-bound compliance and conditional restoration - Administrative facilitation to enable compliance (portal reopening)Cancellation of GST registration for non-filing of returns - Discretionary relief where no tax-evasion is shown - Validity of cancellation of the petitioner's registration on account of non-filing of returns and entitlement to relief where no evasion is alleged - HELD THAT: - The Court found that the registration was cancelled on the ground of non-filing of returns and that the respondents did not allege any dubious process or tax-evasion by the petitioner. Taking into account that suspension or revocation would be counterproductive and impede recovery of tax because the petitioner would be unable to issue invoices and carry on business, the Court exercised a pragmatic discretion to set aside the cancellation. The Court relied on the principle that, in the absence of any allegation of evasion, authorities should permit compliance rather than effecting a measure that frustrates both the taxpayer's business and revenue recovery. The order cancelling registration was therefore interfered with, subject to conditions for compliance by the petitioner. [Paras 7, 9]Order cancelling registration set aside insofar as it rested on non-filing of returns; relief granted by exercising discretionary power because no tax-evasion was shownRestoration of registration subject to filing of returns and payment of tax, interest, fine and penalty - Time-bound compliance and conditional restoration - Administrative facilitation to enable compliance (portal reopening) - Conditions, timeline and administrative steps for restoration of registration and consequence of non-compliance - HELD THAT: - The Court directed that the cancellation order and the appellate order be set aside on the condition that the petitioner files returns for the entire period of default and pays the requisite tax, interest, fine and penalty. The petitioner was given four weeks from receipt of the server copy to comply; respondents were directed to open the portal within two weeks to enable filing and payment. The Court made clear that failure to comply within the stipulated period would cause the benefit of the order to lapse and the writ petition would stand automatically dismissed. These procedural and time-bound conditions were imposed to enable determination of final liability and to ensure that relief is contingent upon actual compliance. [Paras 8, 9, 10, 11]Registration to be restored by the Jurisdictional Officer upon compliance within four weeks; portal to be opened within two weeks; non-compliance to result in automatic dismissal of the petitionFinal Conclusion: The Court set aside the cancellation and the appellate order and directed conditional restoration of the petitioner's GST registration provided the petitioner files all outstanding returns and pays the requisite tax, interest, fine and penalty within four weeks (with the portal to be opened within two weeks); failure to comply will render the petition dismissed. Issues involved: The judgment involves the cancellation of registration under the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017 and the subsequent appeal process.Summary:Cancellation of Registration:The petitioner filed a writ petition seeking restoration of registration under the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017 after it was cancelled due to non-filing of returns. The petitioner's appeal against the cancellation was dismissed on the ground of limitation.Petitioner's Submission:The petitioner's advocate argued that the petitioner was willing to comply with the Act by filing returns but failed to respond to the show cause notice. Citing a previous judgment, it was requested to set aside the cancellation orders and allow the petitioner to file returns.Respondent's Argument:The respondent contended that the petitioner did not comply with statutory provisions, leading to the cancellation of registration.Court's Decision:The court noted that the cancellation was based on non-filing of returns and not on tax evasion. Considering the impact on revenue and the petitioner's business, the court proposed to set aside the cancellation order subject to the petitioner filing returns and paying the necessary tax, interest, fine, and penalty.Conditions for Restoration:The court directed the petitioner to comply with the conditions within four weeks for restoration of registration. Failure to comply would result in dismissal of the writ petition.Operational Directions:The respondents were instructed to open the portal for filing returns and payment within two weeks to facilitate compliance with the court's directions.Disposal of Writ Petition:The writ petition was disposed of without costs, with all parties required to act based on the official copy of the order downloaded from the court's website.