2022 (8) TMI 1175 - HC - GST

Cancellation of petitioners GSTIN Registration - time limitation - The petitioner attempted to file a representation to revoke the cancellation of registration. The same was not accepted, since the request for revocation is not filed within the statutory period of 90 (30 60) days. The representation for revocation of cancellation of registration could not be done. 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, 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 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 - 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 - Petition allowed.

Summary

Issues:
Petitioner seeks to quash the order cancelling GSTIN registration and restore it, citing medical reasons for non-compliance. Government Advocate argues for dismissal based on failure to file returns. Court considers revenue benefits and past precedents for relief.

Analysis:
The petitioner, a business owner, filed a Writ Petition to challenge the cancellation of their GSTIN registration due to non-filing of returns. The petitioner explained that due to health issues, specifically hernia surgery, they were unable to oversee business operations, resulting in non-compliance. The petitioner's representative had been responsible for filing returns, but during the petitioner's medical absence, returns were not filed, leading to the cancellation of registration. The petitioner's plea for revocation was rejected due to exceeding the statutory period for filing such requests.

In response, the Government Advocate highlighted the legal provision under Section 29(2) of the TNGST Act, which mandates automatic cancellation of registration if returns are not filed continuously for six months. The government issued a show cause notice before cancellation, which the petitioner failed to respond to, leading to the cancellation of registration. The Government Advocate urged for the dismissal of the writ petition based on these grounds.

The Court considered the revenue implications and previous judgments where delays were condoned in similar cases. Referring to a specific case, the Court emphasized that bringing back non-compliant taxpayers into the GST regime would benefit revenue collection. The Court decided to allow the writ petition, setting out conditions for the petitioner's compliance. These conditions included filing past returns with due payments, restrictions on utilizing Input Tax Credit, and scrutiny by tax authorities. The Court directed the authorities to facilitate the process for the petitioner to comply with the conditions within specified timelines.

In conclusion, the Court granted relief to the petitioner under specific safeguards to ensure compliance with tax obligations and prevent misuse of benefits. The judgment emphasized the importance of integrating non-compliant taxpayers back into the GST system to uphold the integrity of the tax regime and revenue collection.