Facts of the Case

The petitioner, R. Rajalingam, challenged the order cancelling his GST registration on the ground of continuous non-filing of GST returns. The registration was cancelled with effect from 21.01.2022 under Section 29 of the CGST Act, 2017.

The petitioner submitted that due to the COVID-19 pandemic there were no business transactions, resulting in failure to file GST returns. A show cause notice was issued, followed by cancellation of registration. Since the petitioner could not file an application for revocation within the prescribed period, he preferred an appeal before the appellate authority. However, the appeal was rejected solely on the ground that it was filed beyond the prescribed limitation period.

 Issues Involved


  1. Whether cancellation of GST registration for non-filing of returns should continue despite genuine circumstances arising from the COVID-19 pandemic.
  2. Whether the High Court could grant relief when the statutory appeal had been rejected on the ground of limitation.
  3. Whether the principles laid down in Tvl. Suguna Cutpiece regarding restoration of cancelled GST registrations should be extended to the petitioner.

 Petitioner's Arguments


  • The petitioner contended that due to the COVID-19 pandemic there were no business activities, making it impossible to file GST returns.
  • Although a show cause notice was issued and registration was cancelled, the petitioner could not file the revocation application within the prescribed time.
  • It was argued that the High Court had already granted identical relief in Tvl. Suguna Cutpiece vs Appellate Deputy Commissioner (ST) (GST) and several subsequent cases involving cancellation of GST registrations for non-filing of returns.
  • Therefore, the petitioner sought extension of the same benefit and restoration of the GST registration subject to compliance with the conditions laid down in the earlier judgment.

Respondent's Arguments


The respondents defended the cancellation order and the appellate authority's decision rejecting the appeal as barred by limitation. The Revenue relied upon the statutory provisions governing cancellation and limitation under the GST law.

 Court Order / Findings


The Madras High Court observed that the issue had already been conclusively dealt with in Tvl. Suguna Cutpiece, wherein comprehensive directions had been issued for revival of cancelled GST registrations subject to specified conditions.

The Court further noted that the said judgment had been consistently followed in several subsequent decisions, including:

  • M/s. Maaruthi Foundations Private Limited vs Deputy Commissioner (ST) (FAC)
  • J. Jayakrishnan vs Additional Chief Secretary/Commissioner of Commercial Taxes
  • TVL. Jeyalakshmi Store vs Commissioner of Commercial Taxes
  • M/s. Pearl and Company vs Commissioner of Commercial Taxes

The Court also recorded that the Revenue had accepted the principles laid down in Suguna Cutpiece, as no appeals had been filed against those decisions.

Accordingly, the Court extended the same relief to the petitioner and directed that the writ petition be disposed of on the same terms and conditions contained in paragraph 229 of the Suguna Cutpiece judgment, thereby enabling restoration of GST registration upon compliance with the prescribed conditions.

 

Important Clarification

This judgment reiterates that where GST registration has been cancelled solely due to non-filing of returns and the taxpayer could not seek revocation within the statutory period, the High Court may exercise its writ jurisdiction to grant relief by applying the principles laid down in Tvl. Suguna Cutpiece.

The decision confirms that restoration of registration can be permitted subject to:

  • Filing all pending GST returns.
  • Payment of applicable GST in cash.
  • Payment of interest, penalty, late fee and other statutory dues.
  • Scrutiny and approval of Input Tax Credit before utilization.
  • Compliance with all safeguards prescribed by the Department.

The judgment reinforces the consistent judicial approach adopted by the Madras High Court in granting relief to genuine taxpayers while protecting the interests of the Revenue.

Related Case Laws

  • Tvl. Suguna Cutpiece vs Appellate Deputy Commissioner (ST) (GST) & Others
  • M/s. Maaruthi Foundations Private Limited vs Deputy Commissioner (ST) (FAC)
  • J. Jayakrishnan vs Additional Chief Secretary/Commissioner of Commercial Taxes
  • TVL. Jeyalakshmi Store vs Commissioner of Commercial Taxes
  • M/s. Pearl and Company vs Commissioner of Commercial Taxes

Sections Involved

  • Section 29 of the Central Goods and Services Tax Act, 2017 – Cancellation of GST Registration
  • Article 226 of the Constitution of India – Writ Jurisdiction of High Courts

Link to Download the Order https://www.mytaxexpert.co.in/uploads/1784529796_1009compressed.pdf

 

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