TVL. Alamelu Contracts Vs. The Commissioner of Commercial Taxes & Another in W.P. (MD) No. 4264 of 2022 (High Court – Madras)

No cancellation of GST registration, if return not filed due to no business activity.

Facts:

The proceeding was initiated by the issuance of Show Cause Notice dated 04.07.2019 and the GST registration of the petitioner was cancelled by the authorities vide impugned order dated 16.07.2019 as the petitioner could not file the returns as it was not having business.  The impugned order was communicated to the petitioner electronically.

Petitioner Plea:

  • It was submitted on the behalf of the petitioner that the petitioner could not file the returns prior to cancellation of registration as the business was not operational.
  • Even if the petitioner had filed the returns, it would have filed the ‘nil’ return, thus no prejudice is caused to the revenue.
  • The petitioner was unaware of the order of cancellation of the registration as the business had closed down.
  • The petitioner further relied on the decision of the same court in P.Nos.25048, 25877, 12738 of 2021 and etc… batch (Tvl. Suguna Cutpiece Center Vs Appellate Deputy Commissioner (ST) (GST) and others) and prays for allowing the Writ petition.

Respondents Plea:

  • That opposing the prayer of the petitioner and referring to ’the Principal Secretary/Commissioner of Commercial Taxes, Ezhilagam by a circular dated 07.04.2021, bearing reference P/35/2021-ADC (RC AND M)-CCT-CTD, it was submitted on the behalf of the respondents that the petitioner was granted time to file an appeal against the impugned order however it was not filed, thus prayed for dismissing the Writ Petition

Held:

  • The Hon’ble High Court after considering the submissions from the both sides and the facts of the case observed that the case of the petitioner is quite similar to the decision relied upon by the petitioner in the batch matter.
  • It was further observed that in the aforesaid decision also there was delay in filing the appeal and some directly approached in Writ petitioner against the cancellation of registration order, however considering the overall facts it was held ‘that no useful purpose will be served by keeping such assessee out of the Goods and Services Tax regime, as such assessee would still continue to do business and supply goods and not by bringing them back to the Goods and Service Tax tax fold/regime only the revenue only suffer’.
  • Lastly the Hon’ble High Court allowed the writ petition in terms of the safeguards stipulated in P.Nos.25048, 25877, 12738 of 2021 and etc… batch (Tvl. Suguna Cutpiece Center Vs Appellate Deputy Commissioner (ST) (GST) and others) where in the Hon’ble High court ordered to revive the registration on payment of tax, penalty and uploading of returns and the authorities were directed to make arrangements enabling the petitioners to file returns, pay the tax/penalty/fine.

 

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