Facts of the Case

M/s BJ Builders, represented by its Partner R. Sankar Babu, filed a writ petition before the Madurai Bench of the Madras High Court seeking quashing of Reference No. ZA3303220183072 dated 04.03.2022 issued by the second respondent and a direction to the respondents to revoke the cancellation of the petitioner’s GST registration.

The petitioner’s case was that it was unaware of the cancellation of its Registration Certificate. According to the petitioner, it came to know that its GST registration had been cancelled only after being informed by the other-end tenant establishment.

After becoming aware of the cancellation, the petitioner approached the respondents for restoration of its GST registration. However, the impugned order dated 04.03.2022 was passed on the ground that the request was beyond the prescribed period of limitation.

The petitioner therefore invoked the writ jurisdiction of the High Court and sought restoration of the GST registration by relying upon the consistent line of decisions of the Madras High Court granting conditional relief in similar cases.

Issues Involved

  1. Whether the petitioner could be granted relief for revival of its cancelled GST registration when the request for restoration had been rejected on the ground of limitation.
  2. Whether the benefit of the directions issued in Tvl. Suguna Cutpiece vs Appellate Deputy Commissioner (ST) (GST) and Others could be extended to the petitioner.
  3. Whether the consistent judicial approach adopted by the Madras High Court in similar GST registration cancellation matters should be followed where the Revenue Department had not challenged such orders and those orders had attained finality.
  4. Whether restoration of GST registration could be permitted subject to payment of tax, interest, fine and fee, filing of pending returns and safeguards governing utilisation of Input Tax Credit.

Petitioner’s Arguments

The petitioner submitted that it was unaware of the cancellation of its GST Registration Certificate and became aware of the cancellation only when informed by the other-end tenant establishment.

After acquiring knowledge of the cancellation, the petitioner approached the respondents seeking restoration of the GST registration. However, the second respondent passed the impugned order dated 04.03.2022 on the ground that the matter was beyond the period of limitation.

The petitioner relied upon the decision in Tvl. Suguna Cutpiece vs Appellate Deputy Commissioner (ST) (GST) and Others, W.P. Nos. 25048, 25877, 12738 of 2021 etc. batch, dated 31.01.2022, wherein the Madras High Court had granted relief in similar circumstances subject to detailed conditions.

The petitioner further relied upon the consistent application of the same principle in subsequent decisions, including:

  1. M/s Maaruthi Foundations Private Limited vs Deputy Commissioner (ST) (FAC), reported in 2022 (5) TMI 405.
  2. J. Jayakrishnan vs Additional Chief Secretary/Commissioner of Commercial Taxes, Chennai, reported in 2022 (7) TMI 1226.
  3. TVL. Jeyalakshmi Store, represented by its Proprietor Sivanu Pandian vs Commissioner of Commercial Taxes, reported in 2022 (7) TMI 1275.
  4. M/s Pearl and Company vs Commissioner of Commercial Taxes, W.P.(MD) No. 19127 of 2022.

On this basis, the petitioner sought extension of the same relief and restoration mechanism.

Respondent’s Arguments

The respondents submitted that it was not open to the appellate authority to pass orders disregarding the statutory limitations prescribed under the applicable provisions.

The Revenue contended that the authorities were bound by the prescribed limitation period and, therefore, rejection of an appeal or request admittedly filed beyond the period of limitation was legally sustainable.

Thus, the respondents defended the impugned action on the ground that the statutory authority could not ignore or override the limitation prescribed by law.

Court Order / Findings

The Madras High Court observed that a consistent view had already been taken in similar matters.

The Court specifically noted that the Revenue had not challenged any of the earlier orders of the High Court and, consequently, those orders had attained finality.

The Court further observed that it had consistently followed the directions issued in Tvl. Suguna Cutpiece vs Appellate Deputy Commissioner (ST) (GST) and Others and that the Revenue Department had accepted the said view, as evident from the fact that no appeal had been filed in those matters.

In these circumstances, the High Court held that the benefit extended in the earlier orders, particularly the relief granted in the Suguna Cutpiece case, should also be extended to M/s BJ Builders.

Accordingly, the writ petition was ordered on the same terms as those contained in paragraph 229 of the Suguna Cutpiece judgment.

The Court imposed no costs and closed the connected miscellaneous petitions.

Detailed Conditions Governing Revival of GST Registration

The relief extended to the petitioner was governed by the conditions laid down in paragraph 229 of the Suguna Cutpiece decision, including the following:

  1. The petitioner must file returns for the period prior to cancellation of registration, if not already filed, together with unpaid tax, interest for delayed payment, and the applicable fine and fee for belated filing, within the prescribed period under the directions.
  2. Payment of tax, interest, fine, fee and related dues cannot be made or adjusted from unutilised or unclaimed Input Tax Credit lying with the petitioner.
  3. Any Input Tax Credit remaining unutilised cannot be utilised until it is scrutinised and approved by the appropriate or competent departmental officer.
  4. Only approved Input Tax Credit may thereafter be utilised for discharging future tax liability under the Act and Rules.
  5. GST must also be paid and returns filed for the period subsequent to cancellation of registration by declaring the correct value of supplies, and such GST payment must be made in cash.
  6. Input Tax Credit earned during the relevant period can be utilised only after scrutiny and approval by the respondents or other competent authority.
  7. The Department may impose restrictions or limitations necessary to prevent undue passing of Input Tax Credit and to ensure that the relief is not misused for bill trading.
  8. Upon payment of tax and penalty and uploading of returns in accordance with the directions, the registration shall stand revived forthwith.
  9. The respondents are required to take suitable steps, including instructing GST Network, New Delhi, to make necessary changes in the GST portal architecture to enable filing of returns and payment of tax, penalty and fine.
  10. The departmental exercise is to be carried out within the period specified in the governing directions.

Important Clarification

The judgment does not lay down that statutory limitation provisions become generally irrelevant or that every delayed application for revocation of cancellation must automatically be accepted.

The respondents specifically argued that statutory authorities remain bound by the prescribed limitation period, and the Court recorded that position.

The relief was granted because the Madras High Court had consistently adopted a particular approach in identical GST cancellation matters by following the directions in Tvl. Suguna Cutpiece, and the Revenue had not challenged those orders. The Court expressly noted that those decisions had attained finality and therefore extended the same benefit to the petitioner.

The revival of GST registration was conditional and compliance-based, not unconditional. The taxpayer was required to regularise pending returns, discharge applicable tax and related liabilities, comply with cash-payment requirements for specified periods, and submit Input Tax Credit to scrutiny and approval before utilisation.

Sections / Legal Provisions Involved

Article 226 of the Constitution of India — Constitutional writ jurisdiction of the High Court.

Section 29 of the CGST Act, 2017 / corresponding TNGST Act provisions — Cancellation or suspension of GST registration.

Section 30 of the CGST Act, 2017 / corresponding TNGST Act provisions — Revocation of cancellation of registration.

Applicable GST return, tax, interest, late fee, fine and Input Tax Credit provisions — Relevant to the conditional restoration mechanism adopted by the Court through the directions laid down in Tvl. Suguna Cutpiece.

Link to download the order -https://mytaxexpert.co.in/uploads/1783330260_1323compressed.pdf

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