M/S. Ruthuvika Logistics (Trade Name)/D. Rajesh Varma (Legal Name) vs. Goods And Service Tax Officer

Held

The Court allowed the writ petition. It noted that the factum of submission of returns up to November 2021-22 was not in dispute, as evidenced by the petitioner's statement. In the interest of justice, the Court directed the petitioner to approach the 1st respondent (GST Officer) within two weeks. The petitioner was to submit an explanation to the show-cause notice, enclosing relevant material regarding the filing of returns up to November 2021-22, and also request permission to submit returns for subsequent periods. The 1st respondent was directed to consider this explanation and pass an appropriate order in accordance with the governing law and rules within one week of receiving the explanation. The Court did not impose costs. The ratio decidendi is that where a taxpayer rectifies the default by filing returns and paying taxes after a show-cause notice for cancellation, and faces subsequent technical issues, the authority should consider these circumstances before proceeding with cancellation, especially when the issue is brought before the High Court.

Facts

The petitioner, a registered dealer under the CGST and APGST Acts, received a show-cause notice dated 02.12.2021 from the GST Officer proposing to cancel their registration. The ground for cancellation was the non-filing of returns for a continuous period of six months. As of the notice date, returns for October 2021 and the preceding five months were due, while the November 2021 return was not yet due. The petitioner's registration was suspended from 01.01.2022. Subsequently, the petitioner filed returns and paid taxes up to November 2021. They claimed they could not file returns from December 2021 onwards as the GST portal did not permit them. Despite these actions, the show-cause notice and suspension were not withdrawn, leading the petitioner to file a writ petition seeking a mandamus to set aside the notice.

Key Issues

1. Whether the show-cause notice for cancellation of registration, issued on the ground of non-filing of returns for six continuous months, is sustainable when the petitioner has subsequently filed returns and paid taxes up to the period mentioned in the notice, and faced technical issues with the portal for subsequent periods? (Question of law and fact, turning on Section 29(2) of the CGST Act, 2017 and relevant rules). Petitioner's arguments: The petitioner contended that after receiving the show-cause notice, they filed all pending returns up to November 2021 and paid the due taxes. They further argued that they were unable to file returns from December 2021 onwards due to technical glitches on the GST portal. They sought directions to accept their returns up to November 2021, permit filing of subsequent returns without late fees, and withdraw the show-cause notice and suspension. Revenue's arguments: The Revenue opposed the petition, stating that the show-cause notice was issued statutorily due to the petitioner's failure to deposit returns for six continuous months, and that there were laches on the petitioner's part.