GST registration cancellation revoked; non-filing due to auditor deemed genuine, revocation conditional on specified compliance

HC revoked the respondent's cancellation of the petitioner's GST registration dated 08.02.2024, finding the non-filing of returns was attributable to the petitioner's auditor and constituted a genuine reason for non-compliance. Revocation is conditional upon fulfillment of specified requirements imposed by the court. The court also allowed the bail application.

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Issues: Whether the cancellation of the petitioners GST registration dated 08.02.2024 should be revoked.

Analysis: The petitioner failed to file GST returns for six months due to inaction by an entrusted auditor and expresses willingness to file all pending returns and pay tax liabilities with applicable interest and penalties. The cancellation was examined in light of the stated cause for non-compliance and the petitioners offer to regularize tax dues. Revocation was considered appropriate on terms designed to ensure payment of tax, interest and fees, prevent adjustment from unapproved Input Tax Credit (ITC), and require departmental scrutiny and approval before any unutilized ITC may be applied. Directions were also issued to enable restoration through requisite changes in the GST portal and to stipulate time limits for compliance.

Conclusion: The cancellation of GST registration dated 08.02.2024 is revoked and the registration is restored subject to conditions including filing of pending returns, payment of tax, interest and fees within four weeks of restoration, prohibition on using unapproved ITC, departmental scrutiny and approval of any ITC before utilization, and implementation of portal changes to permit compliance.

Ratio Decidendi: Where non-compliance with GST filing requirements is shown to have occurred due to a genuine cause attributable to an agent and the taxpayer offers to regularize dues, a court may grant conditional revocation of cancellation of registration to enable restoration while safeguarding revenue by requiring payment of dues and departmental scrutiny of Input Tax Credit.

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