Facts of the Case

The petitioner, G. Sadayaramanujam, sought a mandamus directing the Assistant Commissioner (ST), Theni, to accept tax dues of Rs.6,45,414/- (up to November 2021) and Rs.2,81,000/- (up to December 2021, approximately) under GSTIN 33AAACG6670M1ZE without penalty, and to temporarily furnish login credentials to file GSTR-1 and GSTR-3B returns for "Unit B," under his control, since "Unit A" had been leased to a third party holding the password. Respondents 3 to 5 — G. Susila, G. Balamurugan and G. Prabhakar, the petitioner's niece and nephews through his late brother Gurusamy — are connected with the 2nd respondent, GGN Spinning Mill (P) Ltd., whose GST registration had been cancelled for non-filing of returns. An earlier order dated 09.02.2022 disposing of the petition with directions was recalled on 21.03.2022 after the private respondents claimed they were not heard.

Issues Involved

  1. Whether Section 250 of the Companies Act, 2013 (consequences of dissolution) applies so as to bar revival of the company's GST registration, when the company has not actually been dissolved under Section 248.
  2. Whether an alternate remedy under Section 107 of the CGST/SGST Act to appeal the cancellation of registration precludes the writ court from directing revival of the registration.
  3. Whether the petitioner is entitled to temporary credentials to file GST returns for the unit under his control, despite the ongoing family dispute over control of the company.

Petitioner's Arguments

  • The petitioner is ready and willing to pay the outstanding tax dues for Unit B, which is under his effective control, and requires GSTIN login credentials to file GSTR-1 and GSTR-3B returns.
  • Unit A has been leased to a third party who has retained access to the password, preventing compliance for that unit.
  • The private respondents deliberately caused a default in filing returns to force closure of the business and to damage the operations run from Unit B.

Respondent's Arguments

  • The private respondents (2 to 5) opposed the prayer, contending the petitioner had an alternate remedy under Section 107 of the GST enactments to challenge the order cancelling registration.
  • Under Section 250 of the Companies Act, 2013, once a company stands dissolved under Section 248, it ceases to operate as a company from the notified date, and the certificate of incorporation is deemed cancelled.
  • The registration was struck off primarily because GST returns had not been filed.

Court Order/Findings

  • None of the conditions under Section 248 of the Companies Act, 2013 for striking off a company's name are attracted, since Unit B, under the petitioner's control, continues to carry on business.
  • Section 250 applies only where a company actually stands dissolved under Section 248; that condition not being met, the private respondents' reliance on it has no merit.
  • The Section 107 alternate-remedy objection was held irrelevant, since the GST enactments exist to ensure collection of tax on every supply.
  • The private respondents deliberately forced the default to close down the business and impact profits from Unit B; the related NCLT petition, pending since 2003, remains unconcluded.
  • The writ petition was allowed, directing the petitioner to take steps to revive the cancelled GST registration, and requesting the NCLT to expeditiously close the pending company petition (TCP Nos.3 and 20 of 2016). No costs were ordered.

Important Clarification

  • A company's GST registration cannot be treated as incapable of revival on a mere claim of dissolution unless the statutory conditions under Section 248 of the Companies Act, 2013 are actually satisfied.
  • Where a family/shareholder dispute is used to force default in GST compliance for a business unit that continues to function, courts may grant relief to enable that unit's compliance, notwithstanding the existence of an alternate appellate remedy against the cancellation order.

Sections Involved

  • Section 107 of the CGST Act, 2017 — appellate remedy against orders; held not a bar to the writ relief on these facts.
  • Section 248 of the Companies Act, 2013 — power of the Registrar to remove a company's name from the register.
  • Section 250 of the Companies Act, 2013 — effect of a company's dissolution; held inapplicable as the company was not shown to be dissolved.
  • Article 226 of the Constitution of India — writ jurisdiction invoked for mandamus.

Decision – In Favour of

The decision is in favour of the Petitioner/Assessee. The writ petition was allowed, and the petitioner was directed to take steps to revive the cancelled GST registration, with the NCLT requested to expedite closure of the related company petition.

Related Case Laws

No related case laws are available on this site at present.

Case Details

  • Court: Madras High Court (Madurai Bench)
  • Case No.: W.P.(MD) No.22874 of 2021 with W.M.P.(MD) No.19353 of 2021
  • Coram: Hon'ble Mr. Justice C. Saravanan
  • Date of Order: 11.04.2022

Link to Download the Order

Download the full judgment (PDF)

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.