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2022 (4) TMI 188 - HC - GSTRevocation of cancellation of petitioner's registration - failure to file returns continuously for a period of six months - application for revocation of the cancellation of a registration rejected as time barred - HELD THAT - The case of the petitioner is quite similar to the cases of the petitioners in TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. 2022 (2) TMI 933 - MADRAS HIGH COURT . There some of the petitioner had filed an appeal beyond the period of limitation either for filing application for revocation of cancellation, while some of them had directly filed a writ petition against the order cancelling the registration. While some of them filed appeal beyond the statutory period of limitation, there was further delay in filing the writ petition. However, considering the over all facts and circumstances of the case, it was held that no useful purpose will be served by keeping those petitioners out of the Goods and Services Tax regime, as such assessee would still continue to do business and supply goods/services. By not bringing them back to the Goods and Services Tax fold/regime, would not further the interest of the revenue. This writ petition is allowed.
Issues:
1. Cancellation of GST registration due to failure to file returns. 2. Petitioner's inability to respond to Show Cause Notice. 3. Application for revocation of cancellation rejected as time-barred. 4. Petitioner's argument for revocation based on health issues and lockdown. 5. Respondent's stance on cancellation and time given to petitioner. 6. Comparison with similar cases and decision in Writ Petitions of 2021. 7. Direction to allow revival of registration with safeguards. Analysis: 1. The Writ Petition was filed seeking to quash the impugned order cancelling the petitioner's GST Registration due to continuous failure to file returns for six months. The second respondent issued a Show Cause Notice before the cancellation, which the petitioner failed to respond to, leading to the cancellation of registration. 2. The petitioner's counsel argued that the petitioner couldn't reply to the Show Cause Notice due to health issues. Reference was made to a recent decision of the Court where similar relief was granted to other petitioners. The petitioner also claimed ignorance of the cancellation due to the COVID-19 lockdown, subsequently filing pending returns. 3. Despite the petitioner's application for revocation being rejected as time-barred, the petitioner approached the Court for relief. The Government Advocate for the respondents emphasized that the petitioner had ample time to challenge the cancellation but failed to do so, hence no leniency should be granted. 4. The Court compared the present case with similar cases from 2021 where relief was granted to petitioners in comparable situations. The judgment highlighted the importance of integrating such assesses back into the GST regime to prevent revenue loss and ensure compliance with tax obligations. 5. Ultimately, the Court allowed the writ petition, subject to specific conditions and safeguards. The directions included filing pending returns, paying defaulted taxes with interest, restrictions on utilizing Input Tax Credit, and ensuring compliance with GST rules. The respondents were instructed to make necessary changes to facilitate the petitioners' return to the GST system within a specified timeframe.
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