Tvl. Rengasamy Gounder Palanivel vs. The Commissioner Of Commercial Taxes

Held

The Court allowed the writ petition, directing the respondents to revoke the cancellation of the petitioner's GST registration and restore it. The Court followed its consistent view in similar cases, particularly the directions issued in Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others. These directions, as detailed in paragraph 229 of the Suguna Cutpiece order, require the petitioner to file all pending returns prior to cancellation, pay the defaulted tax along with applicable interest, and pay any fine or fee for belated filing. Crucially, the payment of tax, interest, fine, or fee cannot be made or adjusted from any unutilized Input Tax Credit (ITC). Any remaining ITC will be subject to scrutiny and approval by a competent officer before it can be utilized for future tax liabilities. The petitioner must also pay GST and file returns for the period subsequent to cancellation, with payments made in cash. The respondents are to impose necessary restrictions to prevent undue passing of ITC and bill trading. Upon compliance, the registration shall stand revived forthwith. The respondents are also directed to take steps to enable the petitioner to file returns and pay dues through the GST portal. The entire exercise is to be completed within thirty days.

Facts

The petitioner, Tvl.Rengasamy Gounder Palanivel, filed a writ petition seeking revocation of the cancellation of their GSTIN. The Assistant Commissioner (Circle), Palani, had cancelled the petitioner's GST registration on 29.03.2021, effective from the same date, due to the non-filing of GSTR 3B returns for six consecutive months. The petitioner contended that this non-filing was due to severe ill-health and financial crisis, leading to no business transactions. The petitioner also stated they were unable to file an appeal against the cancellation order. The petitioner relied on previous High Court judgments where similar directions were issued in cases of cancelled GST registrations due to non-filing of returns.

Key Issues

1. Whether the cancellation of GST registration for non-filing of returns for six months, due to ill-health and financial crisis, warrants revocation and restoration of the registration, considering the petitioner's inability to file an appeal? Petitioner's arguments: The petitioner argued that the non-filing of returns was due to extenuating circumstances (ill-health and financial crisis) and that they were prevented from filing an appeal. They relied on the directions issued by the High Court in the case of Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others, which provided a mechanism for revival of registration under similar conditions. They also cited subsequent consistent orders of the High Court following the Suguna Cutpiece judgment, noting that the Revenue had not appealed these decisions. Revenue's arguments: The judgment does not record any specific arguments made by the respondents (Revenue).