M/S. Mani Enterprises vs. The Addtional Commissioner Of GST (Appeals)

Held

The Court allowed the writ petition, quashing the impugned orders of cancellation and rejection. The Court followed the decision in Tvl. Suguna Cutpiece vs. Appellate Deputy Commissioner (ST) (GST) and others, holding that no useful purpose would be served by keeping the petitioner out of the GST regime. The Court reasoned that allowing revival of registration integrates businesses back into the GST fold, ensuring tax collection and preventing unfair advantages. The Court acknowledged that while authorities act within statutory limitations, the High Court, under Article 226, can exercise its power to do justice and effectuate the rule of law, especially to uphold the constitutional right to carry on trade. The Court directed the petitioner to file pending returns, pay defaulted tax with interest, and any applicable fine/fee within 45 days, with payments to be made in cash and not adjusted from Input Tax Credit (ITC). ITC would only be usable after scrutiny and approval. The respondents were directed to revive the registration forthwith upon compliance and take steps to enable the petitioner to file returns and pay dues on the GST portal within 30 days.

Facts

The petitioner, M/s. Mani Enterprises, engaged in manufacturing Siddha medicines, had its GST registration cancelled by the Superintendent of CGST & C.Excise (2nd respondent) on 23.05.2022 due to non-filing of GST monthly returns for over six months. The petitioner's part-time accountant was responsible for filing these returns. The petitioner filed an appeal before the Additional Commissioner of GST (Appeals) (1st respondent) after filing the pending returns and paying dues. However, the appeal was rejected on 27.01.2023, citing the delay in filing the revocation request beyond the statutory limitation of 90 days (30+60 days). The petitioner then approached the High Court seeking to quash both orders and revoke the cancellation of their GST registration.

Key Issues

1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution, can quash the orders cancelling the petitioner's GST registration and rejecting the appeal, despite the delay in filing the revocation request beyond the statutory period, considering the petitioner's business activities and the object of the GST regime? Petitioner's contention: The petitioner argued that no useful purpose would be served by keeping them out of the GST regime, as they would continue to do business and supply goods/services. They relied on the decision in Tvl. Suguna Cutpiece vs. Appellate Deputy Commissioner (ST) (GST) and others, which held that assessees should be allowed to revive their registration to integrate them back into the GST fold and ensure tax collection. They contended that the constitutional guarantee to carry on trade and commerce under Article 19(1)(g) should be enforced. Respondents' contention: The learned Senior Standing Counsel for the respondents admitted that the order in Tvl. Suguna Cutpiece was being followed in similar matters. The respondents' authorities acted within the limitations prescribed under the Act and Rules.