Facts of the Case

The petitioner, M/s Balaji Santosh Dhaba, challenged the cancellation of its GST registration before the Telangana High Court by filing a writ petition under Article 226 of the Constitution of India. The GST registration had been cancelled through Form GST REG-19 dated 30.12.2024 on the ground that the petitioner had failed to file GST returns for a continuous period of six months.

The petitioner submitted that there were no outstanding GST dues and that the failure to file returns occurred because its GST consultant failed to file the returns from May 2024 onwards without informing the proprietor. As the statutory time limit for filing an online application for revocation had expired, the GST portal no longer permitted submission of the application. Therefore, the petitioner sought a direction from the Court permitting the authorities to accept a physical application for revocation of cancellation and restore the GST registration.

Issues Involved

  1. Whether the GST authorities can be directed to accept a manual/physical application for revocation of cancellation of GST registration when the GST portal no longer permits online filing due to expiry of the prescribed time limit.
  2. Whether the petitioner should be given an opportunity to restore GST registration where cancellation was solely on account of non-filing of returns and not due to tax evasion or outstanding dues.

Petitioner’s Arguments

  • The GST registration was cancelled only because returns remained unfiled for six consecutive months.
  • There were no pending GST dues payable by the petitioner.
  • The default occurred because the GST consultant failed to file the returns and did not keep the petitioner informed.
  • The petitioner intended to regularize compliance by filing pending returns.
  • Since the GST portal blocked submission of the revocation application after expiry of the statutory time limit, the authorities should be directed to accept the application manually and decide it on merits.

Respondent’s Arguments

  • The State Tax Department submitted that it had no immediate instructions regarding the petitioner's claim that no GST dues were outstanding.
  • It acknowledged that the GST registration had been cancelled only because of non-filing of returns for six consecutive months.
  • It further stated that since the GST portal did not permit filing beyond the prescribed time limit, the petitioner could approach the competent authority with a physical application, which would be considered in accordance with law.

Court Order / Findings

The Telangana High Court observed that the cancellation of GST registration had occurred solely because of continuous non-filing of returns.

Accordingly, the Court directed that:

  • The petitioner shall approach the Deputy State Tax Officer within one week with a physical application seeking revocation of cancellation of GST registration.
  • The competent authority shall entertain the physical application and decide it in accordance with law.
  • The authority shall pass an appropriate decision within three weeks from receipt of the application.
  • The writ petition was disposed of without any order as to costs.

Important Clarification

  • Expiry of the online time limit on the GST portal does not automatically prevent the High Court from granting appropriate relief.
  • Where GST registration has been cancelled solely for non-filing of returns and the taxpayer seeks to regularize compliance, the High Court may permit submission of a manual application for revocation.
  • Acceptance of a physical application does not amount to automatic restoration of GST registration; the competent authority must examine the application and decide it in accordance with applicable law.
  • The judgment emphasizes providing taxpayers with an opportunity to restore compliance where circumstances justify such relief.

Sections Involved

  • Article 226 of the Constitution of India
  • Section 29 of the Central Goods and Services Tax Act, 2017 (Cancellation of Registration)
  • Section 30 of the Central Goods and Services Tax Act, 2017 (Revocation of Cancellation of Registration)
  • Rule 23 of the Central Goods and Services Tax Rules, 2017 (Revocation of Cancellation of Registration)
  • Form GST REG-19

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785407628_2414compressed.pdf

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