GST registration cancellation set aside; final chance given to file returns and pay dues under Section 29

The HC set aside the order dated 31st July 2024 canceling the petitioner's GST registration for failure to file returns. The petitioner was granted one final opportunity to file the outstanding returns for the entire default period and pay the applicable tax, interest, fines, and penalties within four weeks. Upon compliance, the petitioner's GST registration will be reinstated. The court held that reviving the registration would not prejudice revenue interests. The writ petition was disposed of on these terms.

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ISSUES:

Whether cancellation of GST registration for failure to submit returns within the prescribed time under the Central Goods and Services Tax Act, 2017 is sustainable when the appeal period under Section 107(4) has expired.Whether a writ petition can be entertained to set aside an order of cancellation of GST registration to allow filing of returns and payment of dues despite the lapse of the appeal period.Whether revival of GST registration after cancellation benefits the revenue authorities under the said Act.Whether the adjudicating authority or the Court can grant a grace period for filing returns and payment of tax, interest, fine, and penalty after cancellation of registration.

RULINGS / HOLDINGS:

The Court held that although the appeal period under Section 107(4) of the Central Goods and Services Tax Act, 2017 has expired, the writ petition can be entertained to set aside the cancellation order dated 31st July, 2024, to permit filing of returns within a stipulated time.The order of cancellation of GST registration was set aside subject to the condition that the petitioner files returns for the entire period of default and pays the requisite amount of tax, interest, fine, and penalty within four weeks, failing which the writ petition shall stand dismissed automatically.The Court recognized that cancellation of GST registration effectively puts the petitioner out of the purview of the Act, which is "not beneficial to the respondent authorities in terms of generating revenue."The Court directed the concerned authorities to open the portal for the petitioner to enable filing of returns and payment of dues for the entire period of default as per the Court's order.

RATIONALE:

The Court relied on the statutory appeal provisions under Section 107 of the Central Goods and Services Tax Act, 2017, noting the prescribed limitation period and the grace period under Section 107(4).The Court applied precedents from the Hon'ble Madras High Court and the Division Bench of the same High Court, specifically referencing judgments that support granting an opportunity to file returns post cancellation to protect revenue interests (Tvl. Suguna Cutpiece Centre and Subhankar Golder cases).The Court emphasized the principle that cancellation of registration should not be allowed to defeat revenue collection, thereby justifying the revival of registration upon compliance with filing and payment obligations.No dissent or doctrinal shift was noted; the decision follows established judicial approach to balancing procedural compliance with substantive revenue protection.

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