CA-Assessee Dispute Led to GSTR Default and Withholding of Credentials: Delhi HC restores Registration [Read Order]

The Delhi High Court has restored the GST registration of assessee after observing that a prolonged dispute between the assessee and its Chartered Accountant led to non-filing of returns, loss of access to login credentials and eventual cancellation of registration.

The Court established that the circumstances warranted the use of writ jurisdiction to reinstate the registration despite the delay, especially since the cancellation had totally suspended business operations.

In the case, the petitioner M/s Eves Fashion had opposed the cancellation of its GST registration, which had been canceled in October 2021 for non-filing of returns under Section 39 of the CGST Act. The petitioner stated that during the COVID-19 time he fell severely ill and later learned that the Chartered Accountant had not filed returns and was unwilling to disclose the credentials.

Multiple written representations were made to the Department over the subsequent months seeking fresh login details. Even though the Department eventually provided a new username and temporary password, the portal permitted the filing of only a few number of returns, making older periods inaccessible.

The Department contested the petition on the ground that the request for revocation was made after more than three years and that the appellate authority had appropriately dismissed the appeal as barred by limitation under Section 107. It was contended that delay could not be permitted and reliance was placed on the verdict in Addichem Speciality LLP.

The Bench of Justice Prathiba M. Singh and Justice Mini Pushkarna noted that the case was peculiar given the facts. The Court noted that the petitioner was a licensed trader engaged in the apparel business, whose registration had remained revoked despite persistent attempts to access the portal and regular visits to the GST office.

The Court acknowledged the petitioner’s willingness to file all pending GST returns along with late fee and interest ruled that restoration was necessary to allow continuation of commercial activities.

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The Court approved the writ petition and ordered that the GST registration be reinstated within a week and that new login credentials be provided so that all outstanding returns could be filed. Additionally, if online access was still prohibited, the Department was instructed to either enable physical filing or activate the portal.

It added that the Department would remain free to take action in accordance with law once the returns were filed, and that the statutory timelines for issuing notices would not apply in the case at hand, due to delayed filing.

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