The Madras High Court has revoked the cancellation of the petitioner’s GST registration, noting that the petitioner had provided evidence of timely submission of monthly returns. The Court noted a procedural lapse by the department, which failed to take into account the submitted proof of filings before issuing the cancellation order.
The petitioner’s GST registration was first suspended due to non-filing of monthly returns from October 2023, attributed to the petitioner’s medical condition. The respondent, in response to this lapse, issued a cancellation order on 09.11.2023. However, the petitioner appealed the decision, and the GST registration was restored on 17.05.2024.
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Despite the restoration, the petitioner received a new show cause notice on 21.05.2024, accusing them of failing to file returns for the period from October 2023 to April 2024. The petitioner, in their defence, submitted proof of having filed the returns for the specified period. Nevertheless, the respondent proceeded to cancel the GST registration again, leading to the current writ petition.
The petitioner argued that the respondent had disregarded the submitted proof of compliance and issued the cancellation order without proper consideration.
On the other hand, the Additional Government Pleader for the respondent maintained that the cancellation was justified due to the continuous non-filing of returns.
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The court noted that the petitioner had faced genuine difficulties due to medical issues and had taken steps to comply with GST filing requirements. The court observed that the respondent-department’s failure to consider the petitioner’s proof of filing constituted a procedural lapse.
Accordingly, the bench of Justice Krishnan Ramasamy has revoked the cancellation of the petitioner’s GST registration, subject to the following conditions:
(i) The respondent is required to instruct the GST Network in New Delhi to make necessary modifications to the GST web portal to enable the petitioner to file returns and settle any outstanding tax, penalty, or fines within four weeks from the receipt of this order.
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(ii) The petitioner must file all pending returns for the relevant periods, along with any due taxes, interest, and late fees, within four weeks from the date of the GST registration’s restoration.
(iii) Payments for taxes, interest, fines, or fees cannot be made or adjusted using any unutilized or unclaimed Input Tax Credit (ITC) held by the petitioner.
(iv) Any unutilized ITC must be scrutinized and approved by a competent officer before it can be used.
(v) Only ITC that has been approved may be used to settle future tax liabilities under the Act and Rules.
(vi) Any earned ITC must also be approved by the appropriate authority before utilization.
(vii) Failure to comply with these conditions will result in the automatic cessation of the reinstatement benefits.
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With these directions, the writ petition is disposed of.
Mr. P.V.Sudakar and Mr. T.N.C.Kaushik appeared for the petitioner and respondents respectively.
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