The Hon’ble High Court of Madras vide its order dated 17.11.2023 in the matter of E. Dharamraj Vs. The Assistant Commissioner of State Tax, Ambattur Circle in W.P. No. – 28339 of 2023, directed the Authority to restore the registration of the assessee on finding that the petitioner has made genuine transactions and the error has been committed on the part of the auditor who filed GSTR-10 return after getting knowledge of cancellation of the registration of the petitioner.   It was the auditor only who was filing the ‘Nil’ returns continuously without any such instructions from the petitioner.  Therefore, it was observed while granting relief to the assessee that the reason shown by the assessee is genuine.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the impugned order dated 03.02.2023 cancelling the registration of the petitioner.

Petitioner’s Submissions: –

• It was submitted that the petitioner is an illiterate and working as an owner-cum-driver of lorry since the age of 25 years. The petitioner has obtained GST registration in the month of May 2018 in the trade name of M/s. Selvi Transport. The petitioner has engaged the services of an auditor and has provided him with all the login credentials pertaining to GST portal.
• As the petitioner’s business is covered under Goods Transport Agency for which the liability for paying GST is on the service recipient under Reverse Charge Mechanism, the auditor engaged by the petitioner has been continuously filing’ NIL ‘GSTR-1 and GSTR-3B returns instead of showing the actual outwards supplies. Therefore, on the presumption that the petitioner has not commenced any business, the respondent had cancelled the GST registration of the petitioner vide the impugned order.
• The Petitioner payment for the invoice raised has been kept on hold due to inactive GSTIN. Thereafter, only it came to the knowledge of the registration that the GST registration has been cancelled by virtue of the impugned order.  Unless, it is restored, the petitioner is in no position to recover the invoice amount.  Therefore, prayer was made for setting as the impugned order.

On the other hand, it was submitted on the behalf of Revenue that though the revocation of the GST registration was made in the month of February 2023, the petitioner has raised invoices to the tune of Rs.25,03,905/- during the period between June 2023 and October 2023.  Further, the Petitioner has been filing nil returns continuously, due to which the registration was cancelled.  The petitioner has also filed GSTR-10 and the same has been accepted by the department.  Therefore, prayer was made to dismiss the writ petition.

Held: –

• The Hon’ble Court after considering the submissions mad and facts of the case, found that it is an admitted fact that the petitioner is working as an owner-cum-driver of lorry since the age of 25 years and has obtained GST Registration in the month of May 2018 in the trade name of M/s. Selvi Transport.
• The petitioner engaged the services of an auditor and has provided him with all the login credentials pertaining to GST portal. However, without taking proper instructions from the petitioner, the auditor has filed NIL GSTR-1 and GSTR-3B returns instead of showing the actual outwards supplies and therefore, on the presumption that the petitioner has not commenced any business, the respondent had cancelled the GST registration of the petitioner.
• It has been contended by the Revenue that despite the fact GSTR-10 has been filed, the petitioner was not supposed to raise any invoice for the month of June. The Hon’ble Court considering this submission, found that no prudent man would have raised invoices after accepting the cancellation by filing GSTR-10 returns. Thus, the reason assigned by the petitioner appears to be genuine.
• Therefore, the Hon’ble Court was of the view that looking at any aspect it appears that the petitioner had only made genuine transactions and the error had been committed only on the part of the auditor, who had filed GSTR-10 returns after knowing about the cancellation of GSTIN registration of the petitioner. Hence, the impugned order is liable to be set aside and the GSTIN registration No.33AQRPD0201D1ZO standing in the name of M/s. Selvi Transport is directed to be restored.

The Hon’ble Court with the observations & findings, disposed of the writ petition directing the petitioner to file an application on receipt of copy of the order and the respondent shall revoke the cancellation of registration within a period of two weeks thereafter.

To read the complete judgment 2023 Taxo.online 1254