M/S Underscore Aimlabs Private Limited vs. The Superintendent Of Central Tax

Held

The High Court, considering the facts and circumstances, was inclined to allow the petitioner an opportunity to file a reply to the show cause notice. The Court noted that there appeared to be medical grounds for the petitioner's inability to file a reply to the show cause notice on its revocation application. Consequently, the impugned order of rejection of the application for revocation of cancellation of registration dated August 28, 2025, was set aside. The petitioner was directed to file its reply within one week from the date of the order, along with an undertaking to pay outstanding dues of tax, interest, and penalty as per Rule 23 of the Central Goods and Services Tax Rules, 2017. The competent authority was directed to consider the reply and pass an appropriate order in accordance with the law within two weeks thereafter. The writ petition was disposed of accordingly.

Facts

M/s. Underscore Aimlabs Private Limited (the petitioner) filed a writ petition challenging the cancellation of its GST registration. The registration was cancelled by the Superintendent of Central Tax (first respondent) on July 17, 2025, for non-filing of returns for six consecutive months. The petitioner's application for revocation of cancellation was rejected on August 28, 2025, after a show cause notice remained unanswered. The petitioner's subsequent appeal was not entertained as it was time-barred. The petitioner contended that the non-filing of returns was due to the abrupt departure of their accountant and that a family emergency prevented them from replying to the show cause notice on the revocation application. The revenue argued that the petitioner failed to respond to the show cause notice, did not pay outstanding taxes, and was not diligent in pursuing remedies.

Key Issues

1. Whether the cancellation of GST registration and subsequent rejection of the revocation application were arbitrary and illegal, contrary to the provisions of the CGST Act, 2017, and TGST Act, 2017, and judicial pronouncements, violating Article 19(1)(g) of the Constitution of India? Petitioner's arguments: The petitioner argued that the non-filing of returns was due to the accountant leaving the firm without notice. They further contended that a family emergency prevented them from filing a reply to the show cause notice regarding the revocation application. They sought an opportunity to file a reply to the show cause notice by setting aside the rejection of the revocation application, allowing the matter to be decided on merits. Revenue's arguments: The revenue submitted that the cancellation of registration was for non-filing of returns. They pointed out that the petitioner failed to respond to the show cause notice on the revocation application and did not undertake to pay outstanding taxes, leading to the rejection of the revocation application. The revenue also highlighted that the petitioner did not file the appeal within the prescribed time, indicating a lack of diligence.