2025 (12) TMI 319 - HC - GST

Writ relief restoring cancelled GST registration for non-filing under Section 39, considering medical issues and CA dispute

M/s. Eves Fashion Versus Union of India & Ors.

HC exercised writ jurisdiction to direct restoration of petitioner's cancelled GST registration. Despite non-filing of returns under Section 39 CGST Act ... Seeking restoration of Petitioner’s GST Registration which was cancelled - Petitioner had not filed GST returns in terms of Section 39 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The present case presents a peculiar set of facts, where the Petitioner has had medical reasons and a dispute with his Chartered accountant, which led to GST Registration being cancelled. Although under ordinary circumstances, the Court is not inclined to condone delay, the present case indicates that the Petitioner is a bona fide trader who intends to continue his business and requires his GST Registration to be restored for the said purpose - Clearly, the SCN ought to have been replied to by the Petitioner, which he has not, for whatever reason. However, the Petitioner is unable to conduct his business because of cancellation of GST registration . Thus, this is a fit case, in view of the Court, to exercise writ jurisdiction. Accordingly, Petitioner’s GST Registration is directed to be restored within a week from this order - Petition allowed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether the Court could exercise writ jurisdiction to direct restoration of a cancelled GST registration despite expiry of the statutory periods for revocation and appeal and the plea of laches. 1.2 Consequential directions required for enabling filing of pending GST returns, payment of dues and future proceedings by the tax authorities upon restoration of registration. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Exercise of writ jurisdiction for restoration of GST registration despite limitation and laches Legal framework (as discussed) 2.1 The cancellation of GST registration was based on non-filing of returns under Section 39 of the CGST Act, 2017. The appellate authority rejected the appeal as barred by limitation under Section 107 of the CGST Act, 2017. The department also relied on the lapse of more than three years since cancellation, to deny revocation. Interpretation and reasoning 2.2 The Court noted that the show cause notice for cancellation ought to have been replied to by the petitioner but was not, resulting in cancellation of registration. 2.3 The Court took into account the peculiar facts, namely: (i) the petitioner's serious illness during the COVID period; (ii) a dispute with the Chartered Accountant who held the GST portal credentials; (iii) multiple written representations and personal visits to the GST Department seeking access to the portal and restoration of registration; and (iv) eventual issuance of new login credentials, which still did not allow complete filing of past returns. 2.4 The Court found that the petitioner was a bona fide trader intending to continue business and that cancellation of registration had effectively disabled him from carrying on his business. 2.5 While acknowledging that ordinarily delay would not be condoned and that the petitioner had not replied to the initial show cause notice, the Court held that the combination of medical reasons, professional dispute, persistent efforts to regularise compliance, and the impact on the petitioner's ability to do business justified invocation of writ jurisdiction notwithstanding the bar of limitation and the plea of laches. 2.6 The Court distinguished the general rule relied upon by the respondents (including the cited precedent on limitation) by treating the matter as an exceptional case warranting equitable relief. Conclusions 2.7 The Court held that, in the peculiar facts, it was a fit case to exercise writ jurisdiction despite statutory time-bars and alleged laches. 2.8 The Court directed that the petitioner's GST registration be restored within one week from the date of the order. Issue 2 - Directions regarding filing of pending returns, payment of dues, portal access, and future departmental action Interpretation and reasoning 2.9 On a specific query, the petitioner expressed willingness to file all pending GST returns with late fee and interest, if any. The Court proceeded on this undertaking while granting relief. 2.10 To make the restoration effective, the Court directed that a username and password be provided to the petitioner to enable filing of all pending GST returns along with late payment fee and interest. 2.11 Recognising the petitioner's earlier difficulty in portal access, the Court directed that the GST portal be enabled for filing all pending returns, and if electronic filing was not possible, the petitioner be permitted to appear physically and file all returns with applicable dues. 2.12 The Court fixed a specific date, time and authority (Superintendent, Ward 49, CGST, North Commissionerate) before whom the petitioner must appear so that the concerned official can enable filing of all returns and compliances. 2.13 The Court further directed that access to the petitioner's electronic credit ledger be enabled after payment is made and returns are filed. 2.14 While granting these facilitative directions, the Court preserved the department's powers by clarifying that it is at liberty to take any action in accordance with law upon scrutiny of the returns and any discrepancies noticed. 2.15 Considering that GST returns were being permitted to be filed belatedly pursuant to the Court's order, the Court held that, if any show cause notice is to be issued to the petitioner, the usual statutory time limits prescribed for the department would not apply in this case. Conclusions 2.16 The Court directed: (i) restoration of GST registration within one week; (ii) issuance of username and password; (iii) enabling of the GST portal for filing all pending returns, or alternatively permitting physical filing; (iv) petitioner's appearance before the specified Superintendent on the stipulated date and time to facilitate filing; and (v) re-enablement of the electronic credit ledger post-payment. 2.17 The Court clarified that the tax authorities may proceed in accordance with law on the basis of the returns so filed, without being constrained by the usual departmental limitation periods for issuance of show cause notices in this particular case.