Subramaniam Rajesh vs. The Joint Commissioner (Appeals)

Held

The Court allowed the writ petition, extending the benefit of its earlier order in Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others. The Court noted that it had consistently followed the directions issued in the Suguna Cutpiece case and that the Revenue/Department had accepted this view, as evidenced by the absence of appeals in such matters. The operative directions from the Suguna Cutpiece case were applied, which included the petitioner filing all pending returns prior to cancellation, along with payment of defaulted tax, interest, fine, and fees within 45 days. Such payments were explicitly not to be made from Input Tax Credit (ITC). Any unutilized ITC would require scrutiny and approval by a competent officer before being used for future liabilities. The petitioner was also directed to pay GST and file returns for the period subsequent to cancellation in cash. Upon compliance, the registration would stand revived forthwith. The respondents were directed to take steps to enable filing on the GST portal, and the entire exercise was to be completed within 30 days. No costs were awarded.

Facts

The petitioner, Subramaniam Rajesh, proprietor of M/s.Aamutham Enterprises, filed a writ petition challenging the cancellation of his GST registration. The cancellation was initiated by the Superintendent of CGST & C.Excise (2nd Respondent) on 09.09.2021, citing failure to file monthly GST returns for a continuous period of six months, as per Section 29 of the CGST Act, 2017. The petitioner appealed this order to the Joint Commissioner (Appeals) (1st Respondent), who rejected the appeal on 08.09.2022, primarily on the grounds of being filed beyond the limitation period. The petitioner contended that the non-filing of returns was due to the COVID pandemic, which resulted in no business transactions.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the 2nd Respondent, and the subsequent rejection of appeal by the 1st Respondent, are illegal and arbitrary, warranting quashing and revival of the registration? (Mixed question of law and fact, concerning Section 29 of the CGST Act, 2017 and principles of natural justice). Petitioner's Arguments: The petitioner argued that the failure to file returns was a consequence of the COVID-19 pandemic, during which there were no business transactions. He relied on the consistent view of this Court in similar cases, specifically citing Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others (W.P.Nos.25048, 25877, 12738 of 2021 etc., batch), dated 31.01.2022, and subsequent judgments that followed it. The petitioner sought to extend the benefit granted in these precedents. Respondents' Arguments: The respondents did not record any specific arguments against the petitioner's plea for relief based on the precedent. However, their initial action of cancellation and the appellate authority's rejection were based on statutory provisions and procedural grounds (limitation).