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2022 (12) TMI 652 - HC - GSTCancellation of registration - non filing of GST Returns - Petitioner contended that, since he was out of business, the return after September, 2018 could not be filed. The person engaged by the petitioner also was under the impression that since outward supply is zero, there was no need for filing the return. HELD THAT - the order for cancellation of registration dated 22.06.2020 is quite cryptic. It hardly gives any detail, which is otherwise necessary. The effective date of registration is 18.03.2021. It is understandable that the tax payer has not responded to the cancellation proceedings initiated by the respondent nor had he filed his due GST returns and the GSTIN, therefore, was cancelled under section 29(2) of the CGST Act. Considering the fact that there are no returns filed, we are not dilating this issue. As has been noted that from the month of September, 2018, the petitioner has not filed his return and his registration has been cancelled in the month of March, 2021, the adjudicating authority has power to recover the Government dues upto the date of cancellation of registration. The petitioner has already filed the returns from September, 2018 till March, 2021. Correspondingly, the challan of the late fee totalling to Rs.2.94 lakhs (rounded off) has been deposited by him after self-assessing himself. Under the circumstances, when all kinds of readiness is expressed, there is no reason as to why this Court should not permit at this stage, filing of GSTR-1. It is not only not going to prejudice the interest of revenue, but, on the contrary, would facilitate the process of adjudication with all the datas made available online. Moreover, the petitioner appears to be someone, who is keen to continue his business and the State s obligation is to ensure the implementation of the law, but at the same time not to thwart, in any manner, the business prospects of the citizens and, therefore, acceding to the request, we are required to allow this petition. The order of cancellation of registration is quashed and set aside.
Issues Involved:
1. Cancellation of GST registration due to non-filing of returns. 2. Non-response to the show cause notice. 3. Appeal against the cancellation of registration. 4. Restoration of GST registration post compliance. Detailed Analysis: Issue 1: Cancellation of GST Registration Due to Non-Filing of Returns The petitioner, a contractor engaged in providing construction services, had not filed GST returns since September 2018. Consequently, a show cause notice was issued on 22.06.2020 under Rule 22 read with section 29(2)(c) of the Central Goods & Services Act, 2017, asking why the registration should not be canceled for non-filing of returns for a continuous six-month period. The petitioner did not respond to the notice, resulting in the cancellation of his registration on 18.03.2021. Issue 2: Non-Response to the Show Cause Notice The petitioner claimed that the show cause notice was received on the portal but was not communicated to him by his erstwhile consultant, who had left the assignment. This lack of communication led to the non-response to the notice and subsequent cancellation of the GST registration. Issue 3: Appeal Against the Cancellation of Registration The petitioner appealed the cancellation before the Commissioner (Appeals), GST & Excise, on 19.11.2021. Despite submitting written submissions and participating in a video conference hearing, the appeal was dismissed on 31.01.2022. The appellate authority emphasized the petitioner's obligation to file all returns up to the date of cancellation. Issue 4: Restoration of GST Registration Post Compliance Post-appeal, the petitioner filed all pending returns from September 2018 to March 2021 and paid the late fees amounting to Rs.2,94,520/-. He also made a representation on 19.04.2022 for the restoration of his registration number, which was not addressed, prompting the petitioner to seek relief from the High Court. Court's Analysis and Judgment: 1. Cryptic Nature of Cancellation Order: The court noted that the cancellation order dated 22.06.2020 lacked necessary details and was cryptic. The effective date of registration cancellation was 18.03.2021. 2. Compliance and Payment of Dues: The petitioner had filed all pending returns and paid the late fees. He also undertook to pay any further taxes assessed by the authority. 3. Reference to Precedents: The court referenced a similar case, Tahura Enterprise vs. Union of India, where the registration was restored due to the non-filing of returns during the Covid-19 pandemic. The Supreme Court had extended the limitation period for filing applications for revocation of cancellation during the pandemic. 4. Pandemic Considerations: The court considered the impact of the Covid-19 pandemic on the petitioner's ability to comply with filing requirements. The Supreme Court's order extending the limitation period was applicable, providing relief to the petitioner. 5. Restoration of Registration: Given the petitioner's compliance with filing returns and payment of dues, the court found no reason to deny the restoration of GST registration. The court directed the respondent to restore the registration forthwith and allowed the petitioner to file GSTR-1 within 15 days of restoration. The authority was instructed to complete the assessment within six weeks, with the petitioner's cooperation. Conclusion: The court quashed and set aside the cancellation order dated 18.03.2021 and the appellate order dated 31.01.2022. The respondent was directed to restore the petitioner's GST registration immediately, allowing the petitioner to continue his business operations. The petition was disposed of in these terms, emphasizing the balance between legal compliance and facilitating business continuity.
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