M/S. Kottaiyenthal Kanmai Ayakkattuthararkal Nala Sangam vs. The State Tax Officer

Held

The Court held that the cancellation of GST registration for non-filing of returns, particularly when the petitioner is an association of agriculturists involved in dredging work and had not received contract payments, warrants interference. The Court followed the precedent set in Tvl. Suguna Cutpiece vs. Appellate Deputy Commissioner (ST) (GST) and others. The reasoning was that keeping such assessees out of the GST regime serves no useful purpose, as they may continue to supply goods and services without registration, defeating the object of GST. The Court emphasized that the GST enactments are intended to facilitate, not debar, assesses from returning to the fold. The Court exercised its power under Article 226 to effectuate the rule of law and the object of levying and collecting just tax. The impugned order of cancellation was quashed, and consequential relief was granted subject to specific conditions. The ratio is that High Courts can exercise writ jurisdiction to allow revival of GST registration in deserving cases, even if there are procedural defaults, to ensure tax compliance and legitimate trade, provided certain conditions are met.

Facts

The petitioner, M/s. Kottaiyenthal Kanmai Ayakkattutharakal Nala Sangam, an association of agriculturists, had its GST registration (GSTIN: 33AAGAK8072P1Z2) cancelled by the respondent, the State Tax Officer, Mudukulathur, effective from 31.12.2020. The cancellation occurred because the petitioner failed to file GST returns for over six months, attributed to not receiving contract amounts for dredging work from concerned departments. The petitioner approached the High Court seeking to quash the cancellation order dated 17.02.2021 and for a direction to revoke the cancellation, as the respondent was unwilling to restore the registration.

Key Issues

1. Whether the cancellation of GST registration for non-filing of returns for over six months, due to non-receipt of contract amounts, warrants interference under Article 226 of the Constitution of India, considering the petitioner's reliance on the decision in Tvl. Suguna Cutpiece vs. Appellate Deputy Commissioner (ST) (GST) and others. 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 and services. They relied on the precedent set in Tvl. Suguna Cutpiece, which held that such registrations should be revived to integrate assessees back into the mainstream, preventing unintended privileges and ensuring tax collection. Revenue's contention: The learned counsel for the respondent admitted that the judgment in Tvl. Suguna Cutpiece was being followed in similar matters. No other specific arguments were recorded for the respondent.