The Madras High Court has ordered the restoration of the GST registration for M/s. Chendur Film International, a film production company, which had its registration cancelled due to non-payment of taxes.
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Justice Krishnan Ramasamy stated that “…. this Court is of the view that unless and otherwise the order impugned is set-aside, it is difficult for the petitioner to carry on the business and the State, will not be able to collect the revenues. On the other hand, if the registration is revoked, it will motivate the petitioner to do his business and to pay tax…..
….. the third respondent is directed to restore the GST registration of the petitioner, so as to enable him to file all the returns as well as to remit all the statutory dues in accordance with law.”
The case revolves around the company’s inability to file GST returns and pay taxes due to a financial crisis. M/s. Chendur Film International had been compliant with GST requirements until October 2022.
Although the company filed the GSTR-1 return for that period, it could not submit the GSTR-3B return or pay the corresponding tax due to financial constraints. This led to a statutory bar under Rule 59(6)(a) of the CGST Rules, which prevented the company from filing subsequent returns.
The company’s financial situation improved, allowing it to pay a partial amount of ₹1,02,35,000 out of the total ₹10 crore tax liability on December 21, 2023. Despite this, its GST registration was cancelled on July 20, 2024. The company had requested to pay the outstanding dues in instalments but did not receive a response from the authorities. As a result, the production company filed writ petitions seeking to revoke the GST registration cancellation order and restore it.
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Mr. Kably Taiyab Khan, the production company’s counsel, submitted that the financial difficulties were temporary and that the company had made significant efforts to settle its dues.
The counsel for the respondents, however, highlighted that the registration was cancelled due to persistent non-compliance and that the petitioner had delayed approaching the court.
After considering the arguments, the high court decided to set aside the cancellation order. It directed that the GST registration be restored to enable the company to file all outstanding returns and remit statutory dues.
The court stipulated that the restoration process should be completed within two weeks, and the petitioner must settle all returns and outstanding dues within eight weeks following the restoration.
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