Facts of the Case

The petitioner, M/s. Thai Enterprises, represented by its proprietrix Francis Sheela Jeba Rani (GSTIN 33BKDPS5526D1ZC), engaged in the business of plant and machinery, was voluntarily registered under GST and filed returns through an accountant. Due to the accountant's ill health, returns went unfiled for six months despite instructions to file NIL returns, and the petitioner learned of the lapse only when other taxpayers informed it that its registration had been cancelled. A show cause notice dated 10.08.2022 had been issued solely through the web portal, and the registration was cancelled with effect from 31.12.2022 vide order Reference No.ZA330123150013G dated 27.01.2023, for non-filing of returns. The petitioner, not proficient in computer access, had not seen the notice on the portal, and the cancellation order itself recorded no reasons. The petitioner had filed returns up to January 2023 and paid late fees, but could not file thereafter because the registration stood cancelled, and it undertook to pay tax and late fees for the remaining period if registration were restored.

Issues Involved

  1. Whether the cancellation order dated 27.01.2023, passed without recording any reasons, could be sustained.
  2. Whether the petitioner, whose registration was cancelled with effect from 31.12.2022 (just at the cut-off), could avail the benefit of Notification No.03/2023-Central Tax, which extended time up to 30.06.2023 for taxpayers whose registration was cancelled on or before 31.12.2022.
  3. Whether the principle applied in the Tvl. Suguna Cut Piece batch of cases extended to the facts of this case for restoration of the cancelled GST registration.

Petitioner's Arguments

  • Non-filing of returns was attributable to the accountant's ill health despite clear instructions to file NIL returns, and not to any deliberate default by the petitioner.
  • The show cause notice was uploaded only on the web portal, and the petitioner, being unfamiliar with computer access, had no actual knowledge of the proceedings until informed by other taxpayers.
  • The impugned cancellation order was bereft of any reasons, and the Supreme Court's Suo Motu exclusion of the period 15.03.2020 to 28.02.2022 from limitation computation ought to operate in the petitioner's favour.
  • Even though the cancellation (effective 31.12.2022, ordered 27.01.2023) fell right at the edge of the cut-off under Notification No.03/2023-Central Tax, the benefit of that Notification and of the Tvl. Suguna Cut Piece batch precedent ought to be extended, and the petitioner was willing to file all pending returns and pay tax with late fee if the registration were restored.

Respondent's Arguments

  • The Senior Standing Counsel for the respondent defended the cancellation as validly issued pursuant to the show cause notice dated 10.08.2022, for the petitioner's admitted non-filing of returns for six consecutive months.
  • Notification No.03/2023-Central Tax dated 31.03.2023 extended the time for seeking revocation only for registrations cancelled on or before 31.12.2022; the petitioner's registration was cancelled on 27.01.2023, outside that cut-off, and was accordingly not eligible for the Notification's benefit on a plain reading.

Court Order/Findings

  • The Court found that the impugned order dated 10.08.2022 did not record any reasons for cancellation.
  • Notification No.03/2023-Central Tax extended time up to 30.06.2023, but only for registrations cancelled on or before 31.12.2022; the petitioner's cancellation, though dated 27.01.2023, was effective from 31.12.2022, and the Notification itself was under consideration during that period.
  • The Court held the petitioner entitled to the benefit of the Notification notwithstanding the narrow timing mismatch, and further held the issue covered by the judgment in Tvl. Suguna Cut Piece v. Appellate Deputy Commissioner (ST) (GST), where the Madras High Court had condoned delay in revoking cancelled GST registrations in a batch of writ petitions.
  • The writ petition was allowed; the respondent was directed to restore the petitioner's GST registration, following which the petitioner was directed to file returns and pay tax and penalty as per law, with no order as to costs.

Important Clarification

  • Even where a GST registration cancellation falls just outside the cut-off date fixed by an amnesty/revocation notification (here, Notification No.03/2023-Central Tax, cut-off 31.12.2022), the Madras High Court has been willing to extend the benefit by relying on the Tvl. Suguna Cut Piece line of batch orders.
  • A cancellation order that records no reasons is itself vulnerable, independent of any notification-based relief.
  • Taxpayers whose registration cancellation dates narrowly miss a notified amnesty cut-off, and who are willing to comply with pending return filing and payment of tax/late fee, should consider seeking restoration citing this precedent rather than treating the cut-off as an absolute bar.

Sections Involved

  • Section 29(2), CGST/TNGST Act, 2017 — empowers cancellation of GST registration for continuous non-filing of returns.
  • Article 226, Constitution of India — writ jurisdiction invoked to challenge the cancellation.
  • Notification No.03/2023-Central Tax dated 31.03.2023 — extended time up to 30.06.2023 for seeking revocation of registrations cancelled on or before 31.12.2022.

Decision – In Favour of

The decision is in favour of the Assessee: the writ petition was allowed, the cancellation order was effectively set aside in operation, and the respondent was directed to restore the petitioner's GST registration, subject to the petitioner filing pending returns and paying tax and penalty as per law.

Related Case Laws

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

Case Details

  • Court: Madras High Court, Madurai Bench
  • Case No.: W.P.(MD) No.23853 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Mrs. Justice S. Srimathy
  • Decision Date: 29-09-2023
  • Disposal Nature: Allowed; GST registration cancellation revoked

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