Facts of the Case

The petitioner, M/s. 3DOT Energy Private Limited, a company engaged in service and maintenance of windmills and holding GSTN 33AAACZ9548B1ZB, had its GST registration cancelled by order dated 24.02.2023 (Reference No. ZA330223127872T) for non-filing of returns for six months, following a show cause notice dated 08.10.2022 issued on the web portal. The petitioner's case was that its accountant, instructed to file NIL returns, failed to do so due to ill health, and the petitioner learnt of the cancellation only from other traders. Notification No. 03/2023-Central Tax dated 31.03.2023 extended time to revoke cancellation up to 30.06.2023, but only for cancellations made on or before 31.12.2022; the petitioner's cancellation, dated 24.02.2023, narrowly missed this cut-off.

Issues Involved

  1. Whether the petitioner was entitled to revocation of a GST registration cancelled for non-filing of returns, despite falling just outside the window of Notification No. 03/2023-Central Tax.

Petitioner's Arguments

  • The delay in return filing was attributable to the accountant's default during the petitioner's ill health, and the period from 15.03.2020 to 28.02.2022 stood excluded for limitation purposes as per the Supreme Court's Suo Motu order.
  • The issue was covered by the Tvl. Suguna Cut Piece judgment of the Madras High Court, and the petitioner was willing to pay all outstanding GST with late fee if registration were restored, having already filed returns up to November 2021.

Respondent's Arguments

  • The cancellation order dated 08.10.2022 did not record specific reasons, and the department maintained the cancellation on the basis of the petitioner's continuous non-filing of returns for six months.

Court Order / Findings

  • The Court found that the impugned order cited no specific reason for cancellation, and that the petitioner's cancellation date of 24.02.2023 fell just outside the 31.12.2022 cut-off in Notification No. 03/2023, purely because the notification itself was under consideration during that intervening period.
  • The Court held that the petitioner was entitled to the benefit of restoration, the issue being covered by the Tvl. Suguna Cut Piece judgment, and accordingly allowed the writ petition, quashing the cancellation and directing restoration of the GST registration.
  • Post restoration, the petitioner was directed to file all returns and pay tax and penalty as per law, with no order as to costs.

Important Clarification

Where a taxpayer's GST registration cancellation date falls just outside the cut-off specified in a beneficial amnesty notification (such as Notification No. 03/2023-Central Tax) purely due to timing, and the default in filing returns is attributable to bona fide reasons such as an accountant's lapse during the registrant's illness, courts will extend the benefit of restoration by applying the equitable rationale of the Suguna Cut Piece line of judgments rather than mechanically enforcing the notification's cut-off date.

Sections Involved

  • Section 29, CGST Act, 2017 — governs cancellation of registration for continuous non-filing of returns.
  • Section 30, CGST Act, 2017 — provides the mechanism 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 filing of pending returns and payment of tax and penalty.

Case Details

  • Court: Madurai Bench of Madras High Court
  • Case Number: W.P.(MD).No.22336 of 2023
  • CNR / Citation: W.P.(MD).No.22336 of 2023
  • Coram: Hon'ble Mrs. Justice S. Srimathy
  • Date of Order: 13 September 2023

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