Facts of the Case

The petitioner, Arputharaj, approached the Madurai Bench of the Madras High Court by filing a writ petition under Article 226 of the Constitution of India. The petitioner sought issuance of a Writ of Certiorarified Mandamus to call for the records relating to the order dated 21 January 2022 passed by the second respondent, quash the same as illegal and arbitrary, and direct the respondents to revoke the cancellation of the petitioner’s GST registration.

The petitioner had failed to file GST returns for a period of six months. Consequently, the second respondent cancelled the petitioner’s GST registration by order dated 21 January 2022.

The petitioner explained that the returns could not be furnished for more than six months due to the ill-health of the proprietor of the petitioner’s concern. For the same reason, the petitioner was also unable to file an appeal within the time prescribed under the GST law against the cancellation of registration.

The petitioner therefore sought restoration and revival of the cancelled GST registration.

Issues Involved

  1. Whether the petitioner, whose GST registration was cancelled due to non-filing of returns for six months, could be granted an opportunity to revive the registration.
  2. Whether the delay arising from the proprietor’s ill-health and the consequent inability to file a statutory appeal within the prescribed time could justify relief under Article 226 of the Constitution of India.
  3. Whether the benefit of the directions issued in Tvl. Suguna Cutpiece vs The Appellate Deputy Commissioner (ST) (GST) and Others could be extended to the petitioner.
  4. Whether revival of GST registration could be permitted subject to payment of tax, interest, fine/fee and compliance with return-filing requirements.
  5. Whether unutilised or unclaimed Input Tax Credit could be directly used for payment of past tax liabilities arising during the default period.

Petitioner’s Arguments

The petitioner submitted that the failure to furnish GST returns for more than six months occurred due to the ill-health of the proprietor of the petitioner’s concern.

It was further submitted that, due to the same circumstances, the petitioner could not file an appeal within the time stipulated under the Act against the cancellation of GST registration.

The petitioner relied upon the decision in Tvl. Suguna Cutpiece vs The Appellate Deputy Commissioner (ST) (GST) and Others, decided in a batch of writ petitions including W.P. Nos. 25048, 25877 and 12738 of 2021, dated 31 January 2022.

The petitioner contended that identical relief had been granted in comparable cases and that the same benefit should be extended in the present matter.

Respondents’ Arguments / Revenue’s Position

The judgment records the appearance of the learned Government Advocate for the respondents.

The Court specifically observed that the directions issued in Tvl. Suguna Cutpiece had consistently been followed in various subsequent decisions.

The Court further noted that the Revenue/Department had accepted the said view, as was evident from the fact that no appeal had been filed in any of the matters referred to by the Court.

Accordingly, the Court considered it appropriate to follow the established line of decisions and extend similar relief to the petitioner.

Court Order / Findings

The Madras High Court observed that it had consistently followed the directions issued in Tvl. Suguna Cutpiece vs Appellate Deputy Commissioner (ST) (GST) and Others.

The Court also recorded that the Revenue/Department had accepted the said view, as no appeal had been filed in the matters following that precedent.

In view of this consistent judicial approach, the Court held that the benefit extended in the earlier orders, particularly in the Suguna Cutpiece case, should also be extended to the petitioner.

Accordingly, the writ petition was ordered on the same terms as those mentioned in paragraph 229 of the order passed in Tvl. Suguna Cutpiece.

Important Clarification

The judgment does not grant unconditional restoration of GST registration merely because the petitioner approached the High Court.

The revival is subject to strict compliance with the conditions adopted from paragraph 229 of Tvl. Suguna Cutpiece. The taxpayer is required to regularise past and subsequent return defaults, pay applicable tax liabilities and other statutory amounts, and comply with restrictions concerning Input Tax Credit.

A particularly important clarification is that past tax, interest, fine and fee cannot be discharged by adjustment against unutilised or unclaimed Input Tax Credit. Further, Input Tax Credit can be utilised only after scrutiny and approval by the competent authority.

The Court also recognised the Department’s power to impose suitable restrictions to prevent undue passing of Input Tax Credit and misuse of the relief for bill trading.

Therefore, the decision provides a route for revival of cancelled GST registration while simultaneously safeguarding revenue interests and ensuring strict statutory compliance.

Sections / Legal Provisions Involved

Article 226 of the Constitution of India
The writ petition was filed under Article 226 seeking a Writ of Certiorarified Mandamus for quashing the cancellation order and directing restoration of GST registration.

Section 29 of the CGST Act, 2017 / Corresponding TNGST Act Provisions
Relevant to cancellation of GST registration, including cancellation arising from continued non-filing of statutory returns.

Section 30 of the CGST Act, 2017 / Corresponding TNGST Act Provisions
Relevant to revocation of cancellation of GST registration.

Section 107 of the CGST Act, 2017 / Corresponding TNGST Act Provisions
Relevant to the statutory appellate remedy against an appealable order and the prescribed limitation framework.

Section 39 of the CGST Act, 2017 / Corresponding TNGST Act Provisions
Relevant to furnishing periodic GST returns.

Section 50 of the CGST Act, 2017 / Corresponding TNGST Act Provisions
Relevant to interest payable on delayed payment of tax.

Section 47 of the CGST Act, 2017 / Corresponding TNGST Act Provisions
Relevant to late fee for delayed furnishing of statutory returns.

Input Tax Credit Provisions under the CGST/TNGST framework
Relevant because the Court specifically imposed conditions restricting utilisation of unutilised, unclaimed or earned Input Tax Credit unless scrutinised and approved by the competent authority.

Link to download the order -https://www.mytaxexpert.co.in/uploads/1783489860_1381compressed.pdf

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