T S Events And Management vs. Commissioner Of CGST Delhi & Ors.

Facts

The petitioner, T S Events and Management, impugned an Order-in-Appeal dated 31.10.2022, which upheld an order dated 18.01.2021 cancelling its GSTIN registration. The cancellation was based on a Show Cause Notice dated 29.12.2020 for failure to file returns for six continuous months. The petitioner, a sole proprietor, claimed ill-health prevented timely filing of returns and responding to the notice. The cancellation order noted no amount was due. The appeal was dismissed for not showing sufficient cause for revocation and for failing to file a required affidavit confirming future compliance. The petitioner asserted tax liability was discharged and business had halted. The cancellation order itself indicated nil recoverable amount.

Held

The Court held that the petitioner had shown sufficient grounds for the revocation of his GSTIN registration cancellation. The Court acknowledged the petitioner's claim of ill-health during the pandemic, which prevented him from responding to the Show Cause Notice and appearing for a personal hearing. It also noted that the cancellation order itself indicated that no amount was due and payable by the petitioner, a fact that was not disputed by the respondents. The Court found that the mitigating circumstances presented by the petitioner were sufficient to warrant revocation. Consequently, the Court set aside the order dated 18.01.2021 cancelling the petitioner's registration and the order dated 31.10.2022 rejecting his appeal. The respondents were directed to restore the petitioner's GSTIN registration within two weeks, and the petitioner was directed to file all pending returns within four weeks thereafter. The Court clarified that failure to comply would allow the respondents to take further action. The petitioner was also permitted to seek a waiver or reduction of penalties for late filing, with a direction for sympathetic consideration by the respondents.

Key Issues

1. Whether the petitioner demonstrated sufficient cause for the revocation of his GSTIN registration cancellation, considering his ill-health and the fact that no tax dues were outstanding, as required under Section 129 of the CGST Act, 2017 (though not explicitly cited, the context of cancellation due to non-filing and potential penalties relates to such provisions)? Petitioner's contention: The petitioner argued that his severe ill-health, as the sole proprietor, prevented him from filing returns and responding to the show cause notice. He asserted that his tax liability was discharged and no amount was due, as confirmed by the cancellation order itself. He contended that these mitigating circumstances constituted sufficient cause for revocation. Revenue's contention: The respondents argued, through the Appellate Authority's order, that the petitioner failed to show sufficient cause for revocation and did not comply with the requirement to file an affidavit confirming future compliance within fifteen days of revocation, as requested via email dated 06.05.2022.