Facts of the Case

M/s SNVP Infraprojects Private Limited (erstwhile M/s Mhadeo Engineering and Infrastructure Private Limited), holding GSTIN 29AAFCM29469P1ZR, challenged an Order-in-Appeal dated 09.08.2023 by which the Assistant Commissioner of Central Tax, GST Appeal-II, confirmed the cancellation of its GST registration originally ordered on 25.02.2023 by the Superintendent of Central Tax. The appeal had been rejected primarily on the ground that it was filed beyond the permitted time period. The petitioner explained that, on account of work entrusted by KIADB in 2013 and delayed commencement of the contracted work through its sub-contractor M/s Sham Earth Movers, its Input Tax Credit was not reflecting on the GST portal, leading it to bona fide await portal reflection before filing returns for dues up to January 2023.

Issues Involved

  1. Whether the cancellation of GST registration, confirmed in appeal on limitation grounds, could be revoked given the petitioner's demonstrated bona fides and willingness to file returns and clear dues.

Petitioner's Arguments

  • Non-filing of returns was due to a bona fide belief that it could await the ITC being reflected on the GST portal, and not any wilful default.
  • The delay in filing the appeal should be viewed sympathetically, as the petitioner employs a number of persons and cancellation of registration would bring the enterprise to a standstill, causing loss of employment.
  • The petitioner held ITC credit exceeding Rs.4,00,000 and was willing to file all returns and tender any admitted dues, leaving no residual liability that would prejudice the Revenue on revocation.

Respondent's Arguments

  • The Order-in-Appeal had confirmed the cancellation on the ground that the appeal against the original cancellation order was filed beyond the permitted limitation period.

Court Order/Findings

  • The Court noted that the facts, including the petitioner's bona fides, remained largely undisputed, and that in similar circumstances it has previously directed revocation of cancellation on terms requiring the assessee to file returns and clear dues.
  • The Court allowed the petition and directed the Superintendent of Central Tax to revoke the cancellation of GST registration, notwithstanding the impugned Order-in-Appeal, on condition that the petitioner files all pending returns and discharges any outstanding dues within two weeks.
  • It was made clear that if the petitioner failed to file the returns within the time allowed following revocation, the Superintendent would be entitled to cancel the GST registration afresh in accordance with law.

Important Clarification

  • Where an assessee demonstrates bona fides for non-filing of returns — such as ITC not reflecting on the portal — and expresses willingness to comply, courts may direct revocation of GST registration cancellation even where the statutory appeal against cancellation was time-barred, conditional on the assessee filing pending returns and clearing dues within a stipulated period.
  • Such relief is conditional and self-executing in reverse: failure to comply with the filing/payment condition results in the registration being liable to cancellation again.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — governing registration, cancellation and revocation of cancellation of GST registration.
  • Articles 226 and 227, Constitution of India — writ and supervisory jurisdiction invoked to challenge the Order-in-Appeal.

Decision – In Favour of

The petition was allowed in favour of the assessee, with a direction to revoke the cancellation of GST registration, conditional on the petitioner filing all returns and clearing dues within two weeks.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: Writ Petition No. 18572 of 2023 (T-RES)
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice B M Shyam Prasad
  • Decision Date: 29.09.2023
  • Disposal Nature: Allowed - direction to revoke cancellation of GST registration on condition of filing returns and clearing dues

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