2024 (7) TMI 1298 - HC - GST

Cancellation of petitioner s GST registration - default in filing returns for a consecutive period of six months - petitioner s application for condonation of delay in filing an application for revocation of the impugned cancellation order was rejected - HELD THAT - The petitioner does not dispute that he has defaulted in compliance with the provisions of Section 39 of the CGST Act and had not filed the returns as required. However, he has set out an explanation for the same and undertakes that all returns will be filed and outstanding dues will be paid. In TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. 2022 (2) TMI 933 - MADRAS HIGH COURT , the Hon ble High Court of Madras has considered import of the actions of cancellation of the Taxpayer s GST Registration and noticed that department s object cannot be to preclude taxpayers from carrying on their business. The respondents are directed to restore the petitioner s GST Registration. However, this is subject to the condition that the petitioner shall immediately within a period of one week of the petitioner s GST Registration being restored, file the necessary returns and pay all its dues along with interest - petition allowed.

Summary

Issues:
1. Impugning an order cancelling GST registration.
2. Rejection of application for condonation of delay in filing revocation application.

Analysis:

Issue 1: The petitioner challenged the cancellation of their GST registration due to non-filing of returns for six consecutive months. The Proper Officer issued a show cause notice (SCN) and suspended the registration. The petitioner failed to respond to the SCN, leading to the cancellation of registration. The petitioner later applied for revocation, citing a dispute with their accountant as the reason for the delay. However, the application was rejected for being filed beyond the stipulated ninety days. The petitioner admitted the non-compliance but promised to rectify the situation by filing returns and paying dues.

Issue 2: The Court referred to previous judgments highlighting the importance of not hindering taxpayers' business due to registration cancellations. Drawing from these precedents, the Court directed the restoration of the petitioner's GST registration with the condition that all pending returns and dues be settled within a week of restoration. Failure to comply would result in another cancellation. The Court clarified that this decision did not prevent authorities from taking further action for non-compliance or debt recovery.

In conclusion, the Court allowed the petition, ordering the restoration of the petitioner's GST registration under specific conditions. Failure to meet these conditions would lead to another cancellation. The judgment emphasized the importance of compliance with statutory provisions while ensuring that business activities are not unduly disrupted.