Non-Filing of GST Returns During COVID-19: Madras HC Restores Cancelled Registration Conditionally [Read Order]

The Madras High Court has restored the GST ( Goods and Services Tax ) registration of a petitioner whose registration was cancelled due to non-filing of GST returns during the COVID-19 pandemic conditionally.

The petitioner had approached the Court challenging the cancellation order dated 04.01.2023, issued by the GST authorities, citing the complete disruption of business operations during the pandemic as the reason for non-compliance.

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During the hearing, the petitioner’s counsel Mr.Abdul Rahman submitted that the business was at a standstill during the COVID-19 lockdowns, which led to delays in filing GST returns.

Also read: Assessee’s Confusion Over Which SCN to Reply: Madras HC Grants Two Weeks to File Response and Directs Personal Hearing

The counsel further stated that the petitioner was willing to comply with all statutory requirements, including filing pending returns and settling tax liabilities along with applicable interest and penalties.

The respondent's counsel confirmed the cancellation of registration and left it to the discretion of the Court to decide on granting relief.

The High Court found the petitioner’s explanation to be genuine and justified. Justice Krishnan Ramasamy held that the pandemic disrupted normal business functioning at whole and huge, observing that rigid enforcement of compliance timelines during such an unprecedented situation may not serve the ends of justice.

Accordingly, the Court revoked the impugned cancellation order dated 04.01.2023 and directed restoration of the petitioner’s GST registration, subject to strict conditions. These include the direction to GSTN (Goods and Services Tax Network), New Delhi, to make necessary modifications to the portal within four weeks to enable the petitioner to file pending returns and pay outstanding dues.

Also read: Attachment of Senior Citizen’s Pension Account Causes Hardship: Madras HC Allows Monthly Withdrawal of ₹2 Lakh

The petitioner was directed to file all pending returns along with applicable taxes, interest, and late fees within four weeks from the date of restoration.

The Court clarified that these dues must be paid in cash and not adjusted against any unutilized Input Tax Credit (ITC). Additionally, any ITC claim must be scrutinized and approved by the competent authority before it can be utilized.

Also read: Supreme Court Upholds Gujarat HC Verdict: Pre-Deposit via Electronic Credit Ledger Valid for GST Appeals, Rejects Dept’s SLP​​

To Read the full text of the Order CLICK HERE

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