Facts of the Case

The petitioner, M/s. Sri Devi Granites Industries, challenged the order dated 20.08.2023 whereby its GST registration was cancelled suo motu by the State Tax Authorities on account of continuous non-filing of GST returns for six months. The petitioner contended that it had been carrying on business for more than twenty years and had regularly complied with VAT and GST laws. According to the petitioner, it remained under the bona fide belief that its accountant had been filing the GST returns. It was also submitted that the business had suffered severely during the COVID-19 period and, therefore, the petitioner was unaware of the show cause notice issued before cancellation of registration. The petitioner sought restoration of the GST registration, undertaking to pay all applicable late fees and statutory dues.

Issues Involved

  1. Whether the High Court should exercise its writ jurisdiction to restore GST registration cancelled for non-filing of returns after a substantial lapse of time.
  2. Whether the petitioner had provided sufficient explanation for not seeking revocation of cancellation or filing an appeal within the statutory time limits.
  3. Whether gross and unexplained delay could be condoned while invoking the extraordinary jurisdiction under Article 226 of the Constitution of India.

Petitioner's Arguments

  • The petitioner had been conducting business for more than two decades with regular tax compliance.
  • The non-filing of GST returns occurred due to the bona fide belief that its accountant was filing the returns.
  • The COVID-19 pandemic severely affected its business operations.
  • The petitioner was unaware of the show cause notice issued prior to cancellation of registration.
  • Restoration of GST registration was essential for continuation of business.
  • The petitioner expressed willingness to pay all pending late fees and comply with statutory requirements.
  • Reliance was placed upon an earlier Telangana High Court decision in W.P. No. 716 of 2026, wherein similar liberty had been granted to approach the competent authority for revocation of GST registration.

Respondent's Arguments

The State contended that:

  • Although the High Court had granted relief in certain individual cases after expiry of the statutory period, such relief depended upon the specific facts of each case.
  • The present writ petition suffered from gross and unexplained delay.
  • A person whose GST registration had been cancelled could not legitimately continue business without valid registration.
  • The petitioner failed to demonstrate sufficient cause for approaching the High Court after such prolonged delay.
  • Therefore, the writ petition deserved dismissal.

Court Order / Findings

The Telangana High Court dismissed the writ petition and declined to interfere with the cancellation order.

The Court observed that:

  • The GST registration had been cancelled on 20.08.2023, whereas the writ petition was filed only on 13.03.2026, after an inordinate and unexplained delay.
  • The CGST Rules prescribe statutory timelines both for revocation of cancellation of registration and for filing appeals.
  • A litigant invoking writ jurisdiction must demonstrate due diligence and provide a reasonable explanation for delay.
  • The petitioner failed to explain why no action was taken for nearly three years after cancellation of registration.
  • The Court held that the petitioner was attempting to revive a stale cause of action.
  • Since the delay struck at the root of the relief sought, the Court refused to exercise its extraordinary jurisdiction under Article 226 of the Constitution.
  • Accordingly, the writ petition was dismissed without costs.

Important Clarification

This judgment reiterates that:

  • GST registration cancellation should be challenged promptly through the statutory remedies available under the CGST Act and Rules.
  • Mere hardship, business loss, or willingness to pay pending dues does not automatically justify restoration of registration after prolonged inaction.
  • High Courts may refuse relief under Article 226 where there is gross, unexplained, and unreasonable delay.
  • Extraordinary writ jurisdiction is discretionary and cannot ordinarily be invoked to revive stale claims.

Sections Involved

  • Section 39 of the Central Goods and Services Tax Act, 2017
  • Section 37(5) of the Central Goods and Services Tax Act, 2017 (as pleaded by the petitioner)
  • Relevant Provisions of the CGST Rules relating to Revocation of Cancellation of Registration
  • Article 226 of the Constitution of India

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785405064_2409compressed.pdf


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