Facts of the Case

The petitioner, Sambasiva Rao Thokala, proprietor of a business, filed a writ petition before the High Court of Andhra Pradesh at Amaravati challenging an order dated 26.04.2023 passed by the Superintendent of Central Tax, Tenali GST Range, cancelling his GST registration, as well as a preceding suspension order dated 14.01.2023. The registration was suspended and later cancelled on the ground that the petitioner had not filed his GST returns continuously for a period of six months. The petitioner's case was that owing to his ill-health, he was unable to file returns in time, but that after the impugned cancellation order was passed, he filed the pending returns up to the date of cancellation, and therefore sought restoration of his GST registration to continue his livelihood without irreparable economic loss. The petitioner had additionally sought, by way of an interlocutory application under Section 151 of the Code of Civil Procedure, a stay on the operation of both the suspension order dated 14.01.2023 and the cancellation order dated 26.04.2023, apprehending that continued suspension and cancellation of his registration would cripple his ongoing business operations pending final disposal of the writ petition. Cancellation of registration under the CGST Act for continuous non-filing of returns is a common enforcement measure, but it often results in disproportionate hardship to small proprietary businesses that depend on an active GSTIN to issue tax invoices and continue trading. The petition was heard by a Division Bench comprising Justice U. Durga Prasad Rao and Justice A.V. Ravindra Babu, who considered the petitioner's plea in the backdrop of the returns having already been filed subsequent to the cancellation order, up to the date of cancellation itself.

Issues Involved

  1. Whether the cancellation of the petitioner's GST registration for non-filing of returns for six continuous months was liable to be interfered with, given subsequent filing of the pending returns.
  2. Whether the petitioner should be granted liberty to seek restoration of the cancelled registration instead of the Court itself directing restoration.

Petitioner's Arguments

  • Due to ill-health, the petitioner could not submit GST returns in time, resulting in suspension and eventual cancellation of registration for continuous non-filing over six months.
  • After the impugned cancellation order, the petitioner filed the returns up to the date of cancellation, and therefore the authorities should be directed to restore the registration.

Respondent's Arguments

  • The Senior Standing Counsel for the respondents appeared and the order records no serious contest to the factual position regarding subsequent filing of returns by the petitioner.

Court Order/Findings

  • Having regard to the petitioner's submission that the pending returns had since been filed up to the date of cancellation, the Court found it appropriate to grant an opportunity for restoration rather than adjudicate the cancellation on merits.
  • The Court disposed of the writ petition giving liberty to the petitioner to approach the respondent authority with an application for restoration of the cancelled GST registration.
  • The first respondent was directed to consider such application and pass appropriate orders within one week from the date of receiving it, and to communicate the outcome to the petitioner.
  • The petition was disposed of without costs, with connected interlocutory applications, if any, closed as a consequence.

Important Clarification

Where a taxpayer whose GST registration is cancelled for continuous non-filing of returns subsequently files the pending returns, courts commonly grant liberty to seek administrative restoration rather than deciding the cancellation on merits, directing the authority to dispose of the restoration application within a short, fixed timeframe.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — provisions relating to suspension and cancellation of GST registration for non-filing of returns.

Decision – In Favour of

The decision substantially favours the Assessee in practical terms, since a fast-tracked, time-bound route to restoration of the cancelled registration was secured, although the Court stopped short of directly quashing the cancellation and instead left it to the authority to decide the restoration application.

Related Case Laws

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

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: WRIT PETITION NO: 24982 OF 2023
  • CNR: Not available
  • Coram: Honourable Sri Justice U. Durga Prasad Rao and Honourable Sri Justice A.V. Ravindra Babu
  • Decision Date: 04.10.2023
  • Disposal Nature: Writ disposed of with liberty to seek restoration of cancelled GST registration

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