2023 (3) TMI 373 - HC - GST

Cancellation of GST registration of petitioner - failure to file returns for a continuous period of six months - HELD THAT - A plain reading of the impugned order indicates that the petitioner s appeal was dismissed as the Appellate Authority found that the petitioner had not shown sufficient cause for allowing revocation of cancellation of his registration. The Appellate Authority also observed that the petitioner had not filed an affidavit as required by the e-mail dated 06.05.2022 - There is no dispute that the petitioner is the sole proprietor of the concern, T S Events and Management. There is also no reason to doubt the petitioner s claim that he was suffering from ill-health during the period of pandemic and, therefore, was unable to respond to the Show Cause Notice or appear personally before the concerned Officer. In so far as the non-filing of the affidavit is concerned, the petitioner states that he has fully discharged its tax liability and no amount is outstanding. In fact, it is his claim that his business had come to a standstill - The fact that the respondents have also not found that any amount is due from the petitioner, is evident from the cancellation order dated 18.01.2021, which reflects that the amount recoverable from the petitioner is nil. This Court is of the view that the petitioner had shown sufficient grounds for revocation of his cancellation - The impugned order dated 18.01.2021, cancelling the petitioner s registration and the order dated 31.10.2022, rejecting his appeal, are set aside - Petition allowed.

Summary

Issues:
1. Impugning an Order-in-Appeal dated 31.10.2022 cancelling GSTIN registration.
2. Failure to file returns for six months leading to cancellation.
3. Petitioner's ill-health as a reason for non-compliance.
4. Dismissal of appeal due to insufficient cause shown for revocation.
5. Requirement of filing an affidavit for revocation.
6. Sole proprietorship of the concern and health issues.
7. Lack of outstanding tax dues from the petitioner.
8. Mitigating circumstances justifying revocation of cancellation.

Analysis:
The petitioner challenged an Order-in-Appeal dated 31.10.2022 that cancelled the GSTIN registration due to failure to file returns for six months. The petitioner, a sole proprietor suffering from ill-health, claimed inability to file returns timely but had discharged tax liability. Despite not responding to the Show Cause Notice or attending a hearing, the registration was cancelled on 18.01.2021, with no outstanding dues found. The appeal against this cancellation was dismissed for insufficient cause shown for revocation and failure to submit a required affidavit.

The Appellate Authority required the petitioner to file an affidavit confirming timely return filing and tax payment, which was not done. The Court acknowledged the petitioner's health issues during the pandemic and the business standstill. Notably, no outstanding dues were found from the petitioner. Considering these mitigating circumstances, the Court held that the petitioner had shown sufficient grounds for revocation of the cancellation.

The Court allowed the petition, setting aside the cancellation order and the appeal rejection. The respondents were directed to restore the GSTIN registration within two weeks. The petitioner was instructed to file all returns promptly to regularize GST filings within four weeks. Failure to comply would empower the respondent to take legal action, including registration cancellation. The petitioner could request waiver of penalties for late filing, partly due to the registration cancellation, with an expectation of sympathetic consideration by the respondents due to mitigating circumstances.