2023 (5) TMI 921 - HC - GST

Cancellation of the Registration Certificate - failure to file Goods and Services Tax monthly returns for a continuous period of six months - HELD THAT - In identical circumstances, this Court, 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 has held that Since, no useful will be served by not allowing persons like the petitioners to revive their registration and integrate them back into the main stream, the impugned orders are liable to be quashed and with few safeguards - these petitioners deserve a chance and therefore should be allowed to revive their registration so that they can proceed to regularize the defaults. The authorities acting under the Act may impose penalty with the gravity of lapses committed by these petitioners by issuing notice. If required, the Central Government and the State Government may also suitably amend the Rules to levy penalty so that it acts as a deterrent on others from adopting casual approach. This Court feels that the benefit extended by this Court in the earlier orders referred to above in Suguna Cutpiece Centre's case, may be extended to the Petitioner - Petition disposed off.

Summary

Issues:
Challenge to the order of cancellation of Registration Certificate due to failure to file GST returns for six months, Extension of benefit granted in previous cases to the Petitioner, Applicability of limitations on appellate authority's orders.

Analysis:
The judgment revolves around a writ petition challenging the cancellation of a Registration Certificate under Section 29 of the Central Goods and Services Tax Act due to non-filing of Goods and Services Tax (GST) returns for six consecutive months. The Petitioner claimed unawareness of the cancellation due to personal reasons, leading to a delay in filing an appeal within the stipulated time frame. The Petitioner argued that the business was managed by staff during the period of non-compliance. The Court noted the precedent set in a previous case and decided to extend similar directions to the Petitioner.

In a significant development, the Court referred to a previous case involving Tvl. Suguna Cutpiece and issued specific directions for the Petitioner to rectify the non-compliance. The directions included filing returns for the period before cancellation, paying defaulted taxes with interest, and adhering to strict guidelines for utilizing Input Tax Credit. The Court emphasized that the payment of tax, penalty, and return filing would result in the immediate revival of the registration. These directions were to be implemented within specified time frames, ensuring compliance with the statutory provisions.

Moreover, the judgment highlighted the importance of adhering to limitations prescribed for appellate authorities. The Respondent's Standing Counsel emphasized that the appellate authority cannot overlook the prescribed limitations, leading to the rejection of the Petitioner's appeal due to being time-barred. Despite this, the Court decided to grant the benefit extended in previous cases to the Petitioner, aligning with the principles established in earlier judgments.

Ultimately, the Court ordered the writ petition in favor of the Petitioner, applying the same terms as outlined in the previous case of Suguna Cutpiece Centre. The judgment concluded without imposing any costs on the parties involved, thereby closing the connected miscellaneous petition. The decision underscored the importance of compliance with GST regulations while also demonstrating the Court's willingness to provide relief in deserving cases based on established legal precedents.