2023 (3) TMI 623 - HC - GST

Maintainability of appeal - appeal rejected for the reason that it was beyond the period of limitation - HELD THAT - This Court is of the view that restoring the registration would not cause any harm to the department on the other hand it would be beneficial for the state to earn revenue. Further, reliance placed in the case of 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. Petition allowed.

Summary

Issues:
1. Quashing of impugned orders regarding Goods and Service Tax Registration restoration.

Analysis:
The petitioner, engaged in a construction business, sought to quash the order canceling their GST registration due to the failure of their accountant to file returns during the Covid-19 pandemic. The petitioner argued that restoration of registration would benefit the state in revenue collection. The petitioner cited a previous case where the court condoned delays in similar circumstances. The respondents contended that the registration was canceled due to the petitioner's failure to file returns despite a show cause notice. The respondents prayed for dismissal of the writ petition.

The Court considered the submissions and observed that restoring registration would be beneficial for revenue collection. Referring to a previous case, the Court noted that keeping entities out of the GST regime would not serve the interest of revenue. The Court highlighted the importance of bringing petitioners back into the GST fold to ensure legitimate business operations. Consequently, the Court allowed the writ petition subject to certain conditions to safeguard against abuse and ensure compliance with tax regulations.

The Court directed the petitioners to file returns for the period before the cancellation of registration, pay defaulted taxes with interest, and comply with fine and fee requirements within 45 days. Input Tax Credit utilization was regulated, and future tax liabilities were to be paid in cash. The respondents were authorized to impose restrictions to prevent misuse of Input Tax Credit. Upon fulfilling the requirements, the registration would be revived immediately. The respondents were instructed to make necessary changes to the GST Web portal to facilitate compliance by the petitioners within 30 days.

In conclusion, the Court allowed the writ petition with specified conditions to enable the petitioner to revive their GST registration and continue their business activities lawfully. No costs were awarded, and the connected writ miscellaneous petition was closed.