M/S. Thai Enterprises vs. The Superintendent Of CGST And C.Excise

Held

The Court allowed the writ petition. It found that the cancellation order dated 10.08.2022 lacked any cited reason. While acknowledging that Notification No.03/2023-Central Tax dated 31.03.2023 extended time for taxpayers whose cancellation was on or before 31.12.2022, and the petitioner's cancellation on 27.01.2023 fell outside this period, the Court considered that the petitioner's situation warranted relief. The Court reasoned that the petitioner was entitled to the benefit, especially as the matter of extension was pending during that period. The Court also noted that the issue was covered by the judgment in Tvl. Suguna Cut Piece’s case. The respondent was directed to restore the petitioner's GST registration. Upon restoration, the petitioner was directed to file returns and pay tax and penalty as per law. No issue was expressly left undecided.

Facts

The petitioner, M/s. THAI ENTERPRISES, a business dealing in plant and machineries, had its GST registration cancelled by the respondent, The Superintendent of CGST & C.Excise, Dindigul-I Range, Dindigul, via an order dated 27.01.2023 (Reference No.ZA330123150013G). The cancellation was due to non-filing of GST returns for six months. The petitioner contended that their accountant, responsible for filing returns, fell ill and failed to file NIL returns as instructed. The petitioner only became aware of the cancellation when other taxpayers informed them. A show cause notice dated 10.08.2022 was issued on the web portal, which the petitioner, not being proficient in computer access, claims not to have seen. The petitioner stated they had filed returns up to January 2023 and were willing to pay late fees and taxes upon restoration of their registration.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the respondent on 27.01.2023 is illegal, arbitrary, and liable to be quashed, considering the petitioner's circumstances and the availability of amnesty schemes and extensions? The petitioner argued that the cancellation order was illegal and arbitrary. They contended that their failure to file returns was due to their accountant's ill health and that they had instructed the accountant to file NIL returns. The petitioner also highlighted that the period from 15.03.2020 to 28.02.2022 was excluded for limitation purposes by the Supreme Court. They further referred to a Madras High Court judgment in Tvl.Suguna Cut piece Vs Appellate Deputy Commissioner (ST) (GST) that condoned delays in revoking cancelled GSTN registrations. The petitioner also pointed out Notification No.03/2023-Central Tax dated 31.03.2023, which extended time for taxpayers whose cancellation was on or before 31.12.2022, noting their cancellation was on 27.01.2023, thus missing the benefit. The petitioner claimed the show cause notice was issued on the web portal, which they are not proficient with, and that the impugned order lacked details. The respondent did not record any specific arguments.