Sri Sudesh Venugopal Shetty vs. Union Of INDIA

Held

The Court set aside the impugned order dated 11.09.2023, which cancelled the petitioner's GST registration. The Court directed Respondent No. 3 to forthwith restore the GST registration of the petitioner. The petitioner was also directed to file all returns in accordance with the law and pay the necessary taxes within a period of one month from the date of the order. The Court's reasoning was based on the submissions made by the respondents' counsel, who agreed to the restoration of registration if the petitioner complied with filing returns and paying taxes. The principle established is that where a taxpayer demonstrates a willingness to rectify non-compliance and the revenue authority has no objection to restoration conditional on such compliance, the High Court may direct restoration.

Facts

The petitioner, Sri Sudesh Venugopal Shetty, proprietor of M/s. Dial Mantra-Mantra Tourism Development Company, filed a writ petition challenging the cancellation of his GST registration. The cancellation was based on the ground that the petitioner failed to file GST returns in accordance with the law. The petitioner contended that his inability to file returns was due to losses incurred during the COVID period and his ill health. He further submitted that if his registration were restored, he would comply with the law by filing all pending returns and paying the due taxes.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by Respondent No. 3, the Superintendent of Central Tax, was justified on the grounds of non-filing of GST returns, considering the petitioner's stated reasons of financial hardship due to COVID-19 and ill health? Petitioner's contention: The petitioner argued that his failure to file returns was an unavoidable consequence of the financial distress caused by the COVID-19 pandemic and his personal health issues. He expressed willingness to rectify the non-compliance by filing all pending returns and paying the outstanding taxes if his registration was restored. Revenue's contention: The respondents, represented by the Union of India and the Superintendent of Central Tax, through their counsel, conceded that they had no objection to the restoration of the petitioner's GST registration provided the petitioner filed all necessary returns and paid all taxes due for the previous years.