The Hon’ble High Court of Madras vide its order dated 01.04.2022 in the matter of Tvl. GK Digital Printing Vs. The Assistant Commisioner, Tiruppur & Another in W.P.Nos.27365 & 27368 of 2021 and W. M. P. Nos. 28875, 28876 & 28880 of 2021, ordered for restoration of GST registration, subject to conditions therein, which was cancelled due to non-filing of returns.

The Petitioner filed the present writ petition under Article 226 praying to call for the records on the files of first respondent in Reference No. ZA331019054504S, dated 16.10.2019 and quash the same as being without jurisdiction and authority of law in Writ Petition No. – 27365 of 2021.  However, Writ Petition No. – 27368 of 2021 was filed with a prayer to call for the records on the files of the second respondent in Appeal No. 362/2021 dated 27.09.2021 and quash the same as being without jurisdiction and contrary to the principles of Natural Justice.

Facts: –

• That both the Writ petitions were taken up hearing at the same time.
• It is the case of the Petitioner that its registration was cancelled vide order dated 16.10.2019 by the respondents for non-filing of returns continuously for period of six months.
• Further, by order dated 27.09.2021, the appeal (No. – 362/2021) filed by the Appellant under Section 107(1) of TNGST Act, 2017, against the order of cancellation of registration dated 16.10.2019, was dismissed by the respondents on the ground of limitation.
• It appears that vide impugned order dated 16.10.2019, the petitioner’s registration was cancelled due to non-filing of reply to the Show cause notice dated 01.10.2019, which was issued proposing to cancel the registration of the petitioner for non-filing of returns for more than six months.
• That the petitioner instead of filing an application for revocation of registration preferred an appeal (362/2021) against the said order dated 16.10.2019. The said appeal was dismissed by order dated 27.09.2021 on the ground of limitation, observing that ‘the Honourable Supreme Court in Suo-Motu writ petition (Civil) No.3 of 2020 dated:08.03.2021 (for extension of limitation) is not applicable to the case of the petitioner as the petitioner received the copy of the order on 16.10.2019 and had time till 15.01.2020 for filing the appeal, and even one month extended period if the sufficient cause is shown, which expired on 15.02.2020.  However, the Appellant filed the appeal before this forum only on 23.08.2021 by a further delay of one year, six months and 8 days. Therefore, the appellant is ineligible to take shelter under the above-mentioned Supreme Court’s order.

 Petitioner’s Submissions: –

• It was submitted on the behalf of the petitioner that the Central Board of Indirect Taxes and Customs further issued Notification No. 19/2021 – Central Tax, dated 01.06.2021, wherein, for the registered persons who failed to furnish the return in FORM GSTR-3B for the months /quarter of July, 2017 to April, 2021, by the due date but furnished the said return between the period from the 1^st day of June, 2021 to the 31^st  day of August, 2021, the total amount of late fee under Section 47 of the CGST Act, 2017 was waived which is in excess of five hundred rupees.
• Further to help the struggling dealers, the Government extended the time limit for seeking revocation of cancellation of registration up to 31.  08.2020 for all dealers whose registration was cancelled from July 2017 to 12^th June, 2020 and it expired after 15.03.2020 (COVID – 19 Lockdown) is deemed to be extended till further orders of the Hon’ble Supreme Court. However, it was incidentally extended till 30.09.2021 by the Government vide Notification No. 34 – Central Tax dated 29.08.2021.
• That due to cancellation of registration vide order dated 16.10.2019, the petitioner could not file the returns with payment of GST. However, the returns have been filed with payment of late fee till November 2021 as per Notification No. 19/2021 – Central Tax dated 01.06.2021 and 29.08.2021.
• It was informed that the petitioner could not file the reply to the Show Cause Notice dated 01.10.2019 issued by the respondents. In this regard, it was submitted that even if the petitioner could not file the reply, the respondents ought to have given justifiable reason for cancelling the registration of the petitioner.  It has been cancelled on a bald ground that petitioner has not responded to the said Show Cause Notice dated 01.10.2019.
• That the order dated 16.10.2019 cancelling the registration, came to knowledge of the petitioner belatedly. Further, the appeal (No. 362/2021) filed against the same was also dismissed by the respondents on the ground of limitation.  Therefore, he prays for quashing of impugned orders and revocation of the cancellation of the GST registration.

On the other hand, it was submitted on the behalf of the respondents that the petitioner has not filed returns for more than six months.  The petitioner appeal filed by the petitioner was dismissed on the ground of limitation as it was filed with delay.  Thus, requested for dismissing the Writ Petition.

Held: –

• The Hon’ble Court after considering the submissions from the both sides, facts & and the documents on record found that the issue involved in the matter was considered in detail by this Court in Suguna Cutpiece Center Vs. The Appellate Deputy Commissioner (ST) (GST) and another, in W.P.No.25048 of 2021 etc. batch, vide order dated 31.01.2022 wherein, considering the revenue of Government it was held that: –
• Since, no useful will be served by not allowing persons like the petitioners to revive their registration and integrate them back into the main stream, I am of the view that the impugned orders are liable to be quashed and with few safeguards;
• There are adequate safeguards under the GST enactments which can also be pressed against these petitioners even if their registrations are revived so that;
• Further, the Government requires tax to meet its expenditure. By not bringing these petitioners within the GST fold, unintended privilege may be conferred on these petitioners unfairly to not to pay GST should they end supplying goods and/or services without registration.
• Therefore, if such a person is not allowed to revive the registration, the GST will not be paid, unless of course, the recipient is liable to pay tax on reverse charge basis. The ultimate goal under the GST regime will stand defeated. Therefore, these petitioners deserve a right to come back into the GST fold and carry on their trade and business in a legitimate manner.

The Writ Petitions were allowed subject to conditions that:- (i) The petitioners are directed to file their returns for the period prior to the cancellation of registration, , together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, (ii) Payment of tax, interest, fine/fee shall not be from adjustment of Input Tax Credit, (iii) Input tax credit lying unutilized shall not be utilized without scrutiny or approved by the Department, (iv) Approved ITC shall be allowed to discharge future tax liability, (v) Petitioners shall also file returns for the period subsequent to cancellation of registration with payment of GST, (vi) directed respondents to ensure there is no attempt to do bill trading by taking advantage of this order, (vii) On payment of tax, penalty and uploading of returns, the registration shall stand revived forthwith, (viii) The respondents shall take suitable steps by instructing GST Network, New Delhi to make suitable changes in the architecture of the GST Web portal to allow these petitioners to file their returns and to pay the tax/penalty/fine.

The Hon’ble Court in the light of directions given in the above order allowed the Writ Petition.

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