M/S. Rmh Engineering vs. The Assistant Commissioner (Circle)

Held

The Court allowed the writ petition, extending the benefit previously granted in the case of Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others. The Court directed that the petitioner be allowed to file their returns for the period prior to the cancellation of registration, along with any defaulted tax, interest, fine, and fees, within forty-five days of receiving a copy of the order, if not already paid. It was clarified that such payments could not be made from unutilized Input Tax Credit (ITC). Any existing ITC would remain unutilized until scrutinized and approved by a competent officer. Only approved ITC could be used for future tax liabilities. The petitioner was also directed to pay GST and file returns for the period subsequent to the cancellation, with payments in cash. The respondents were permitted to impose restrictions to prevent undue passing of ITC or bill trading. Upon payment of dues and uploading of returns, the registration would stand revived. The respondents were also instructed to take steps to enable the filing of returns and payment of dues through the GST portal. The entire exercise was to be completed within thirty days of receiving the order.

Facts

The petitioner, M/s.R.M.H.Engineering, engaged in electrical works contract, had its GST registration cancelled by the respondent, the Assistant Commissioner (Circle), on 06.05.2022. The petitioner claimed to be regular in filing monthly returns (GSTR-3B and GSTR-1) and paying GST on time. However, due to the alleged carelessness of their part-time accountant, the GST monthly returns were not filed. Subsequently, returns up to April 2022 were filed belatedly with late fees. The petitioner approached the High Court seeking to quash the cancellation order and direct the revocation of the cancellation, as the respondent was unwilling to restore the registration. The petitioner also stated that they could not file an appeal in time due to these circumstances.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the respondent is illegal and arbitrary, warranting its quashing and revocation. Petitioner's Contention: The petitioner argued that the cancellation of GST registration was due to the oversight of their part-time accountant in filing monthly returns. They subsequently filed the belated returns with late fees but were unable to file an appeal within the stipulated time. They 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, which provided a framework for relief in such situations. Respondent's Contention: The judgment does not record any specific arguments or contentions made by the respondent. However, the respondent passed the order cancelling the registration, which is the action under challenge.