Delhi HC Restores GST Registration for Non-Compliance with Section 39 of CGST Act and Failure to File Returns [Read Order]

In a recent Judgement, the Delhi High Court has reinstated the Goods and Service Tax ( GST ) registration of a taxpayer despite non-compliance with Section 39 of the CGST Act and failure to file returns. The assessee, Rainbow Products has filed the present petition an order dated 19.12.2023, whereby the assessee’s GST registration was canceled and an order dated 27.05.2024, whereby the assessee’s application for condonation of delay in filing an application for revocation of the impugned cancellation order was rejected.

The assessee, who was registered with the GST authorities, defaulted in filing its returns for a consecutive period of six months.

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The Proper Officer issued a show cause notice dated 13.11.2023 calling upon the assessee  to show cause as to why its GST Registration not be canceled on account of failure to furnish the returns under Section 39 of the Central Goods and Services Tax Act, 2017 for a continuous period of six months. The assessee was called upon to respond to the said SCN within a period of thirty days from the date of the SCN and was directed to appear before the Proper Officer on 11.12.2023. The assessee’s GST Registration was also suspended on the same date – 13.11.2023.

The assessee made an application for revocation of the impugned cancellation order, whereby its registration was cancelled. The assessee stated that there was some dispute with its accountant and, therefore, it was unable to file the application for revocation of the impugned cancellation order cancelling the assessee’s GST Registration.

He also undertook to file its GST return and to pay all its dues, if any, within a week of the respondents restoring its GST Registration. The Proper Officer dismissed the assessee’s application as it was filed beyond the stipulated period of ninety days.

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The assessee 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.

The division bench consisting of Justice Vibhu Bakhru and Justice Sachin Datta deemed it appropriate to allow the present petition and directed the respondents to restore the petitioner’s GST Registration, however, this was 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.

Get the Complete Handbook on Filing of GST Returns, Click here.

It was also clarified that this would not preclude the respondent authorities from initiating any other action for non-compliance with statutory provisions or recovering any amount that may be due. Accordingly, the petition was disposed of.

To Read the full text of the Order CLICK HERE

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