2024 (4) TMI 855 - HC - GST

Cancellation of the petitioner's GST registration - petitioner had not filed returns for a continuous period of six months - HELD THAT - Section 29(2)(c) of applicable GST enactments, as its stood at the relevant point of time, enabled cancellation of registration for non filing of returns by a registered person for not less than a continuous period of six months. The petitioner has placed on record proof of filing of GSTR 1 and 3B returns for August and September 2022-23. Such returns were filed in February 2023. The impugned order of cancellation was issued on 15.03.2023, which is subsequent thereto. By the time of cancellation, on account of the filing of the returns for August and September of assessment period 2022-23, it could not have been concluded that the petitioner had not filed returns for a continuous period of six months. In those circumstances, the impugned order of cancellation cannot be sustained. The impugned order of cancellation dated 15.03.2023 is set aside and, as a consequence, the registration of the petitioner shall stand restored. Such restoration is subject to the petitioner filing returns for all periods commencing from the effective date of cancellation - petition disposed off.

Summary

Issues:
Challenge to cancellation of GST registration and subsequent appellate order.

Cancellation of GST Registration:
The petitioner challenged the cancellation of their GST registration, attributing the non-filing of returns to the departure of their Accountant. Despite receiving a show cause notice, the petitioner filed GSTR 1 and GSTR 3B returns for August and September of the assessment period in February 2023. The petitioner argued that there was no contravention of Section 29(2)(c) of GST enactments as of the relevant time. The cancellation order was issued on 15.03.2023 after the filing of these returns, rendering it unsustainable.

Appellate Proceedings:
The petitioner's counsel referred to the show cause notice and evidence of filing returns for August and September 2022-23. Although the petitioner applied to revoke the cancellation and filed an appeal, the appeal was dismissed on grounds of limitation. The Government Advocate contended that the petitioner failed to file returns for a continuous six-month period as per the show cause notice, citing the precedent of Suguna Cutpiece.

Legal Analysis:
Section 29(2)(c) of GST enactments allowed cancellation of registration for non-filing of returns for a continuous period of six months. The show cause notice alleged such non-filing, but the petitioner submitted proof of filing returns for August and September 2022-23 before the cancellation order was issued. Consequently, the cancellation order could not be upheld as it was based on the assumption of continuous non-filing for six months, which was not the case.

Judgment:
The High Court set aside the cancellation order dated 15.03.2023, restoring the petitioner's registration conditionally upon filing returns for all periods from the cancellation date. The ruling clarified that it would not impede any proceedings related to the petitioner's tax liability. The writ petition was disposed of with no costs, and related motions were closed accordingly.