Writ Petition No.20239 of 2023

Facts of the Case

The petitioner's GST registration was cancelled with effect from 15.01.2023 on the ground that returns had not been submitted for the period January to December 2022, a continuous default that ordinarily attracts cancellation under Section 29 of the CGST Act. Rather than allow the default to persist, the petitioner took corrective steps and filed the pending returns for the entire defaulted period up to the date of cancellation, along with any applicable late fee. Having regularised compliance but finding the registration still suspended, the petitioner approached the High Court of Andhra Pradesh under Article 226 of the Constitution, seeking a direction to the department to consider the belatedly filed returns on their merits and to revoke the cancellation order in the interest of justice, so that normal business operations under GST could resume.

Issues Involved

  1. Whether cancellation of registration for non-filing of returns could be revisited where the assessee subsequently filed the pending returns.
  2. Whether the department could be directed to consider such post-cancellation returns and decide on revocation.

Petitioner's Arguments

  • Counsel for the petitioner submitted that after cancellation, the petitioner had filed returns up to the date of cancellation, and requested that the department be directed to consider these returns and revoke the cancellation order.

Respondent's Arguments

  • The Government Pleader for Commercial Tax submitted that since the petitioner had failed to submit returns from January to December 2022, the GST registration was validly cancelled with effect from 15.01.2023, and there was no legal flaw in the impugned order.

Court Order / Findings

  • In view of the respective submissions, and noting that the petitioner had since filed the pending returns, the Court directed the respondent to consider the returns submitted by the petitioner and pass an appropriate order regarding revocation of the cancellation.
  • The department was directed to decide the revocation expeditiously, but not later than one week from receipt of a copy of the order. The writ petition was allowed without costs.

Important Clarification

  • Where a taxpayer regularises pending returns after cancellation of registration for non-filing, courts will generally direct the department to consider those returns on their merits for revocation, rather than treating the cancellation as an irreversible bar.
  • Such relief is typically time-bound, requiring the department to decide the revocation application within a short, specified period, so that the assessee is not left in a prolonged state of business disruption.
  • This approach reflects a broader judicial trend of favouring restoration of GST registration once compliance is substantially regularised, since continued cancellation serves no revenue purpose once the underlying returns and any applicable late fee have been filed.

Sections Involved

  • Section 29, CGST Act, 2017 — cancellation of registration for continuous non-filing of returns beyond the prescribed period.
  • Section 30, CGST Act, 2017 — revocation of cancellation of registration, invoked implicitly through the direction to consider the filed returns; ordinarily requires filing of all pending returns and payment of dues before an application can be entertained.
  • Article 226, Constitution of India — invoked to seek a mandamus directing the department to consider the belated returns and decide on revocation.

Decision – In Favour of

The decision is in favour of the assessee, with a direction to the department to consider the filed returns and decide the revocation of cancellation expeditiously.

Case Details

Court: High Court of Andhra Pradesh
Case Number: Writ Petition No.20239 of 2023
Coram: Hon'ble Sri Justice U. Durga Prasad Rao and Hon'ble Smt. Justice Venkata Jyothirmai Pratapa
Date of Order: 11.08.2023

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