Facts of the Case

The petitioner, proprietor of M/s. Atheefa Mathiyastha Kadai Jewellery, voluntarily registered under GST with GSTIN/UIN 33BHXPM6489C1ZR, had her registration cancelled by the Assistant Commissioner (ST), Tenkasi, by order dated 25.08.2022 (Reference No. ZA330822089689V) for non-filing of returns for the preceding six months. The petitioner claimed the default arose because her accountant, instructed to file NIL returns, failed to do so due to her own ill health, and she only learnt of the cancellation from other traders. She had since filed returns up to January 2023 with late fee, and was willing to pay tax and late fee for the remaining period, but could not do so as her registration stood cancelled. Notification No. 03/2023-Central Tax dated 31.03.2023, extending time to revoke cancellations, was available only to registrations cancelled on or before 31.12.2022, while the petitioner's cancellation was dated 25.08.2022 (with limitation running further into 31.07.2022 as an earlier cancellation reference), narrowly missing coverage in her specific circumstances as computed by the department.

Issues Involved

  1. Whether the petitioner was entitled to revocation of cancellation despite the impugned order being bereft of specific details.
  2. Whether the benefit available under the Suguna Cut Piece line of judgments and the exclusion of the COVID period for limitation could be extended to the petitioner's case.

Petitioner's Arguments

  • The period from 13.03.2020 to 28.02.2022 stood excluded for limitation purposes per the Supreme Court's Suo Motu order, and this Court's decision in Tvl. Suguna Cut Piece v. Appellate Deputy Commissioner had condoned similar delays in revoking cancelled GST registrations.
  • Notification No. 03/2023-Central Tax's cut-off of 31.12.2022 unfairly excluded her, though she was unaware of the notification and remained willing to pay all tax and late fee if the registration were restored.

Respondent's Arguments

  • The cancellation order recorded that the dealer neither responded to the show cause notice nor appeared for personal hearing, justifying the cancellation as per the record.

Court Order / Findings

  • The Court noted the petitioner could not avail Notification No. 03/2023 only because her cancellation fell just outside its cut-off date, through no deliberate default, and that the matter was covered by the Tvl. Suguna Cut Piece judgment.
  • The Court held that the petitioner was entitled to the benefit of restoration despite technically falling outside the notification's window, and accordingly quashed the cancellation order, directing restoration of the GST registration.
  • Post restoration, the petitioner was directed to file all pending returns and pay tax and penalty as per law; the writ petition was allowed with no costs.

Important Clarification

Where a GST registration is cancelled for non-filing of returns due to genuine hardship (such as the proprietor's ill health or an intermediary's default), and the assessee is willing to comply on restoration, courts have consistently extended the benefit of revocation even to cases falling just outside an amnesty notification's specified cut-off dates, applying the rationale of the Suguna Cut Piece line of decisions.

Sections Involved

  • Section 29, CGST Act, 2017 — governs cancellation of GST registration, including for continuous non-filing of returns.
  • Section 30, CGST Act, 2017 — provides for revocation of cancellation of registration.

Decision – In Favour of

In favour of the Assessee — the cancellation order was quashed and registration ordered restored, subject to the petitioner filing all pending returns and paying tax, interest and penalty.

Case Details

  • Court: Madurai Bench of Madras High Court
  • Case Number: W.P.(MD).No.22967 of 2023
  • CNR / Citation: W.P.(MD).No.22967 of 2023
  • Coram: Hon'ble Mrs. Justice S. Srimathy
  • Date of Order: 21 September 2023

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