Facts of the Case

Uma Sigamani's GST registration (GSTIN 33AOAPU6052N1ZM) was cancelled by an order dated 07.10.2024 for non-filing of returns for a continuous period of six months. The petitioner explained that this lapse was on account of financial constraints and ill health, and expressed willingness to file the pending returns and pay the entire tax liability along with applicable interest and penalty if the cancellation were revoked.

Issues Involved

  1. Whether cancellation of GST registration for continuous non-filing of returns should be revoked where the assessee shows a genuine reason for the default and undertakes to clear all dues.

Petitioner's Arguments

  • The failure to file returns for six months was on account of genuine financial constraints and ill health, not wilful default.
  • The petitioner is willing to file all pending returns and pay the tax, interest and penalty due, and sought revocation of the cancellation order.

Respondent's Arguments

  • The Additional Government Pleader confirmed the fact of cancellation and left the matter to the Court's discretion for an appropriate order.

Court Order / Findings

  • The Court found the reason given for non-compliance — financial constraints and ill health — to be genuine, and was inclined to revoke the cancellation.
  • Revocation was made subject to conditions: payment of Rs.2,000 to a specified medical institution; instructing GST Network to enable portal access for filing returns and paying dues within four weeks of proof of payment; filing of all pending returns with tax, interest and belated-filing fee within four weeks of restoration.
  • Crucially, such payment of tax, interest, fine or fee was directed not to be made or adjusted from any unutilised Input Tax Credit; any unutilised ITC was to remain frozen until scrutinised and approved by a competent officer, and could be used for future tax liability only after such approval.
  • Non-compliance with any condition would cause the benefit granted under the order to automatically cease to operate.

Important Clarification

  • Where a registration-cancellation revocation is granted on hardship grounds, courts are routinely attaching a standard set of safeguards preventing the assessee from discharging its revival dues out of unscrutinised, unutilised ITC, and requiring departmental scrutiny before any such credit can be used, as a check against misuse of the revival window.

Sections Involved

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

Decision – In Favour of

In favour of the Assessee — cancellation of registration was revoked, subject to payment of dues, a nominal cost, and safeguards on the use of unscrutinised ITC.

Case Details

Court: Madurai Bench of the Madras High Court — Case No.: W.P.(MD) No. 36324 of 2025 — Coram: Hon'ble Justice Krishnan Ramasamy — Date of Order: 18 December 2025.

Link to Download the Order

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