Facts of the Case

  • Business Operations: The petitioner, M/s W. G. Resorts (Assam) Private Limited, is a private limited company engaged in the business of running hotels and resorts, situated at Kaziranga, Village Bochagaon, P.O. and P.S. Kaziranga, District Golaghat, Assam.
  • GST Registration & Non-Compliance: To operate its business, the petitioner was required to obtain and maintain a valid GST registration. However, due to reasons beyond its control—specifically including the severe disruptions caused by the outbreak of the COVID-19 pandemic—the petitioner failed to file its regular GST returns.
  • Impugned Order of Cancellation: As a consequence of non-filing, the competent GST authority issued an impugned order dated 29/12/2020 cancelling the petitioner's GST registration.
  • Impact & Challenge: The cancellation of the GST registration caused severe operational hardship and seriously hampered the business activities of the petitioner, prompting the filing of the present writ petition before the High Court seeking urgent restoration.

Issues Involved

  • Validity & Continuity of Cancellation: Whether the cancellation of the petitioner's GST registration due to non-filing of returns during the COVID-19 pandemic period should be maintained when the petitioner is willing to comply with statutory return filings and tax payments.
  • Applicability of Revocation Terms: Whether the GST registration of the petitioner can be restored by invoking the procedure and conditions under Rule 23 of the Central Goods and Services Tax (CGST) Rules, 2017 upon depositing all pending dues.

Petitioner’s Arguments

  • Uncontrollable Circumstances: Learned counsel for the petitioner, Mr. R.B. Mishra, submitted that the non-filing of regular GST returns was not deliberate but resulted from circumstances beyond the petitioner’s control, primarily triggered by the COVID-19 pandemic.
  • Severe Business Loss: It was argued that the administrative cancellation of the GST registration severely disrupted and hampered the day-to-day business operations of the resort.
  • Willingness to Pay Dues: The petitioner contended that it had already deposited necessary statutory amounts and expressed full readiness to clear any remaining statutory liability or tax shortfall without delay to secure immediate restoration.

Respondent’s Arguments

  • Standing Counsel’s Instructions: Learned Standing Counsel for the GST department, Mr. S.C. Keyal, submitted instructions received from the authority stating that the department had no objection to revoking the cancellation.
  • Condition of Compliance: The revocation could be effected with immediate effect provided the petitioner files all up-to-date GST returns and deposits the full tax amount due along with all associated statutory liabilities in strict accordance with Rule 23 of the CGST Rules, 2017.

Court Order / Findings

  • No Justification to Keep Petition Pending: The Hon'ble Gauhati High Court (presided over by Hon'ble Mr. Justice Suman Shyam) observed that since both parties agreed on the mechanism for revocation, there was no justification for keeping the writ petition pending.
  • Direction for Restoration: The High Court disposed of the writ petition with the consent of both sides, directing the respondent authorities to restore the petitioner's GST registration immediately upon the petitioner filing the pending returns and depositing the required statutory dues as per the Rules.
  • Time-Bound Intimation: The Court directed Respondent No. 4 (The Superintendent, CGST, Jorhat) to intimate the petitioner within 10 days from the date of the order regarding any exact outstanding statutory dues payable, enabling the petitioner to file returns and make necessary deposits promptly.

Important Clarification

  • Relief on Dues Compliance: Cancellation of GST registration due to non-filing during extraordinary circumstances (like COVID-19 disruptions) can be revoked without prolonged litigation if the taxpayer manifests clear intent to clear outstanding tax liabilities and file up-to-date returns in accordance with Rule 23 of the CGST Rules, 2017.

Section Involved

  • Rule 23 of the Central Goods and Services Tax (CGST) Rules, 2017: Governs the process and conditions for the revocation of cancellation of GST registration.
  • Article 226 of the Constitution of India: Writ Petition WP(C)/6232/2022 invoking the extraordinary writ jurisdiction of the High Court.

Link to download the order - https://mytaxexpert.co.in/uploads/1784627169_1868compressed.pdf

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