2024 (5) TMI 45 - HC - GST

Cancellation of GST registration - condonation of delay in preferring the appeal against the order of cancellation - HELD THAT - The appellate authority cannot be faulted for not considering the appeal in view of the language of Section 107 of the Central Goods and Services Tax Act, 2017. At the same time, the petitioner should not be left without remedy. The reasons set out in the order of cancellation is non payment of collected taxes for a continuous period of three months. In the decision 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 , this Court directed restoration of registration subject to certain conditions. In the over all facts and circumstances, the petitioner is entitled to an order on similar lines. The impugned order passed by the third respondent dated 25.8.2023 is set aside. Consequentially, the order, if any, passed by the second respondent rejecting the appeal filed by the petitioner against the order dated 25.8.2023 passed by the third respondent, is also set aside - petition disposed off.

Summary

Issues involved:
The cancellation of GST registration and condonation of delay in filing the appeal against the cancellation.

Cancellation of GST Registration:
The petitioner's GST registration was cancelled due to failure to file returns from April 2023, resulting in a show cause notice and subsequent cancellation order by the third respondent. The petitioner, facing financial difficulties due to the Covid-19 pandemic, sold personal assets to settle debts. An appeal against the cancellation was filed but not entertained by the second respondent, citing a delay in filing. The petitioner sought restoration of registration, having paid tax dues and willing to comply with filing requirements.

Condonation of Delay in Filing Appeal:
The petitioner contended that the delay in filing the appeal was due to financial constraints caused by the pandemic. Despite filing an appeal against the cancellation of GST registration, it was not considered by the second respondent, leading to the present writ petition. The petitioner expressed readiness to fulfill tax obligations and requested restoration of GST registration.

Court's Decision:
The Court acknowledged the non-payment of taxes for three consecutive months as the reason for cancellation, in line with the Central Goods and Services Tax Act. Referring to a previous case, the Court directed restoration of registration with specific conditions. The order set aside the cancellation and rejection of the appeal, instructing the petitioner to file returns, pay outstanding dues with interest and fees, and comply with regulatory requirements within a specified timeframe. The Court emphasized that any unutilized Input Tax Credit must be approved before adjustment, and only approved credits can be used for future tax liabilities. The restoration of registration was contingent upon fulfilling the prescribed conditions, with directions for necessary changes in the GST Web portal architecture.