GST Registration Cancelled for Non-Filing of Returns Can Be Restored If Taxpayer is Willing to Pay Dues Without Non-Suiting on Limitation: Karnataka HC [Read Order]

In a recent ruling, the High Court of Karnataka held that GST registration cancelled for non-filing of returns can be restored if the assessee is willing to pay the dues, without non-suiting the plea solely on the ground of limitation.

G.L. Thippeswamy Contractor, the petitioner, filed the appeal as his registration was cancelled by the Assistant Commissioner for failure to file returns continuously for a period of six months. The petitioner's appeal against this cancellation was subsequently dismissed by the Joint Commissioner of Commercial Taxes (Appeals) on the sole ground of limitation, noting that the appeal was not filed within the prescribed three-month period.

The petitioner's counsel submitted that monthly returns had been filed until the date of the cancellation order and that the assessee was willing to file all pending returns and pay the requisite taxes, interest, and penalty once the GST portal was enabled.

The Court noted that the cancellation order was an ex-parte decision. It was observed that the Court's consistent view in such matters is to allow restoration of registration when the assessee is willing to offer all tax dues along with interest and penalty.

"It emerges that the Court's consistent view, when the decision to cancel registration is an ex parte decision and the assessee is willing to offer all the tax with interest, is to allow restoration of registration subject to the assessee filing upto date Returns and offering tax, interest and penalty within a reasonable time," Justice B.M. Shyam observed.

The High Court quashed the cancellation order and the appellate order dismissing the appeal on limitation grounds. The Court directed the restoration of registration subject to the condition that the petitioner uploads all returns and pays taxes, interest, and penalty within two weeks from the date the portal enables the assessee to do so.