Facts of the Case

The petitioner, M/s. Immanuvel Dharmaraja Store, challenged the order cancelling its GST Registration Certificate. The registration had been cancelled on the ground that the petitioner failed to file GST monthly returns, and the cancellation was made effective retrospectively from 31.03.2018 under Section 29 of the CGST Act, 2017.

The petitioner submitted that monthly returns for the period from June 2019 to August 2021 had not been filed due to unavoidable circumstances. A show cause notice had earlier been issued seeking an explanation for the non-filing of returns. Subsequently, the petitioner discharged the outstanding tax liability along with applicable penalty for the said period. However, after cancellation of registration, the petitioner was unable to file returns or pay tax for the subsequent period.

An appeal filed before the Appellate Authority was rejected solely on the ground that it was filed beyond the prescribed period of limitation. Aggrieved by the rejection, the petitioner approached the Madras High Court by filing the present writ petition.

 

Issues Involved

  1. Whether GST registration cancelled under Section 29 of the CGST Act for non-filing of returns could be restored through the High Court's writ jurisdiction.
  2. Whether rejection of the statutory appeal on the ground of limitation prevented the petitioner from obtaining relief.
  3. Whether the principles laid down in Tvl. Suguna Cutpiece vs. Appellate Deputy Commissioner (ST) (GST) were applicable to the present case.

 

Petitioner’s Arguments

  • The petitioner had already paid the outstanding tax dues along with the applicable penalty for the default period.
  • The cancellation of GST registration prevented further compliance with GST provisions, including filing of returns and payment of taxes.
  • The appellate authority rejected the appeal only because it was filed beyond the limitation period without considering the merits of the case.
  • The petitioner relied upon the judgment of the Madras High Court in Tvl. Suguna Cutpiece, wherein the Court granted relief by directing restoration of GST registration subject to fulfilment of specified conditions.

 

Respondent’s Arguments

  • The GST registration had been cancelled in accordance with Section 29 of the CGST Act, 2017 due to continuous non-filing of GST returns.
  • The appeal against the cancellation order was rightly rejected as it had been filed beyond the statutory period of limitation.
  • The respondents defended the legality of the cancellation order and the appellate authority's decision.

 

Court Order / Findings

The Madras High Court observed that the issue had already been conclusively considered in Tvl. Suguna Cutpiece vs. Appellate Deputy Commissioner (ST) (GST), where comprehensive directions were issued for revival of cancelled GST registrations.

The Court further noted that the principles laid down in Suguna Cutpiece had consistently been followed in several subsequent decisions, including:

  • M/s. Maaruthi Foundations Private Limited vs. Deputy Commissioner (ST) (FAC) – 2022 (5) TMI 405.
  • J. Jayakrishnan vs. Additional Chief Secretary/Commissioner of Commercial Taxes – 2022 (7) TMI 1226.
  • TVL. Jeyalakshmi Store vs. Commissioner of Commercial Taxes – 2022 (7) TMI 1275.
  • M/s. Pearl and Company vs. Commissioner of Commercial Taxes.

The Court also recorded that the Revenue Department had accepted the view taken in Suguna Cutpiece, as no appeals had been filed against those decisions.

Accordingly, the High Court extended the same benefit to the petitioner and ordered that the writ petition would stand allowed on the same terms and conditions contained in paragraph 229 of the Suguna Cutpiece judgment.

 

Important Clarification

The judgment reiterates that cancellation of GST registration for non-filing of returns does not necessarily deprive a genuine taxpayer of the opportunity to regularize compliance. Following the Suguna Cutpiece principles:

  • The taxpayer must file all pending GST returns.
  • Outstanding tax, interest, penalty, late fee and other statutory dues must be paid.
  • Payment must generally be made in cash and not by adjustment of unverified Input Tax Credit.
  • Input Tax Credit can be utilized only after proper scrutiny and approval by the department.
  • Upon compliance with the prescribed conditions, GST registration is liable to be revived.

The decision further reinforces that the High Court may exercise its writ jurisdiction under Article 226 to grant appropriate relief where statutory remedies have become unavailable due to limitation, particularly in cases involving bona fide taxpayers seeking restoration of GST registration.

 

Relevant 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 the High Court.
  • Relevant provisions relating to filing of GST Returns, payment of Tax, Interest, Penalty, Late Fee, and Input Tax Credit (ITC).


Link to download the order -

https://www.mytaxexpert.co.in/uploads/1784626287_1639compressed.pdf

 

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