GST Registration Restored: COVID Non-Compliance Resolved with Conditional Compliance and Mandatory Return Filing Under Section 30

HC upheld petitioner's GST registration restoration after COVID-related non-compliance. Court mandated filing of pending returns, payment of tax dues with interest, and specific conditions for Input Tax Credit utilization. Registration revival contingent on meeting prescribed compliance requirements within 45 days, with automatic revocation if conditions not fulfilled.

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Issues:
Challenge of cancellation of GST registration and restoration of registration.

Analysis:
The petitioner challenged the cancellation of GST registration due to non-compliance caused by the COVID-19 pandemic and subsequent lockdown, leading to delayed filing of returns. The respondent issued a show cause notice proposing cancellation, which was followed by the actual cancellation order. The petitioner, upon becoming aware of the order, paid a significant sum towards the tax liability. The court acknowledged the genuine reasons for non-compliance due to the pandemic.

The court revoked the cancellation of registration subject to specific conditions. The petitioner was directed to file returns for the period before cancellation, pay tax dues with interest and fees for belated filing within 45 days. It was clarified that such payments cannot be made from unutilized Input Tax Credit (ITC) without scrutiny and approval. Any unutilized ITC must be approved before utilization for future tax liabilities. The petitioner was also required to pay GST and file returns for the period after cancellation, declaring the correct value of supplies.

Additionally, any earned ITC could only be utilized after approval by the respondent or a competent authority. Upon payment of tax, penalty, and return filing, the registration would be revived, and the bank account attachment lifted. The respondent was instructed to make necessary changes in the GST Web portal to facilitate these actions within 45 days. Non-compliance with any condition would automatically revoke the benefits granted under the order.

With these directions, the writ petition was disposed of without costs, and the connected miscellaneous petition was closed.

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