2022 (9) TMI 209 - HC - GST

Revocation of cancellation of registration of petitioner - petitioner failed to file the returns for continuous period of six months - Section 29 (2) (C) of the CGST Act - HELD THAT - Perusal of the materials, it is seen that the petitioner during the Covid-19 pandemic period had not filed his returns and thereafter, he had not conducted any business so that he filed only nil returns. Further this case 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. Petition allowed.

Summary

Issues involved:
Cancellation of GST registration due to failure to file returns for a continuous period of six months during the Covid-19 pandemic; Petitioner's attempt to revoke cancellation beyond the statutory limitation of 90 days; Commissioner's direction to exclude the pandemic period for computing limitation; Comparison with similar cases where delay was condoned; Respondent's argument of failure to respond to show cause notice and appeal remedy; Court's analysis of the petitioner's situation during the pandemic; Decision to grant relief and revive registration with specific conditions.

Analysis:
The judgment pertains to the cancellation of GST registration of the petitioner due to failure to file returns for a continuous period of six months during the Covid-19 pandemic. The petitioner, a proprietor of a business, faced challenges as the business shut down and he suffered from ill-health during the pandemic, leading to the inability to engage the accountant and file returns. The petitioner received a show cause notice for cancellation but failed to respond within the stipulated time frame, resulting in the cancellation of registration. The petitioner attempted to file a representation for revocation beyond the statutory limitation of 90 days, which was not accepted.

The Commissioner of Commercial Taxes had directed to exclude the pandemic period for computing the limitation, citing an order of the Hon'ble Apex Court. The petitioner relied on past cases where delays were condoned by the Court in similar circumstances. However, the respondent argued that the petitioner failed to file returns and appeal in a timely manner, opting to approach the Court directly. The respondent sought dismissal of the writ petition based on these grounds.

The Court considered the petitioner's situation during the pandemic, where business activities were halted, and noted similarities with past cases where delays were condoned. The Court emphasized the importance of integrating businesses back into the GST regime to ensure compliance and revenue generation. The judgment granted relief to the petitioner, quashing the cancellation order and reviving the registration with specific safeguards and conditions.

The Court outlined detailed conditions for the petitioner to follow, including filing past returns with defaulted taxes, paying interest, fines, and fees, and complying with GST regulations moving forward. The Court restricted the utilization of Input Tax Credit until approved by competent authorities, ensuring no misuse of benefits. The judgment highlighted the need for businesses to operate legitimately within the GST framework and directed the respondents to facilitate the necessary changes in the GST Web portal for compliance.

In conclusion, the Court allowed the writ petition, subject to the specified conditions, to revive the petitioner's registration and enable continued business operations within the GST regime.