Rajalakshmi vs. The State Tax Officer (Circle)

Held

The Court allowed the writ petition, extending the benefit granted in the case of Tvl.Suguna Cutpiece Vs Appellate Deputy Commissioner (ST) (GST) and others to the petitioner. The Court noted that it had consistently followed the directions issued in the Suguna Cutpiece case, and the revenue had accepted this view by not filing appeals in such matters. Therefore, the Court felt it appropriate to extend the same relief to the present petitioner. The operative directions mirrored those in paragraph 229 of the Suguna Cutpiece order, which included directions for the petitioner to file pending returns and pay tax, interest, fine, and fees within 45 days, with specific conditions regarding the utilization of Input Tax Credit and payment in cash for subsequent periods. The registration was to be revived forthwith upon compliance, and the respondents were to take steps to enable the filing of returns and payment on the GST portal within 30 days.

Facts

The petitioner, Rajalakshmi, filed a writ petition challenging the cancellation of her GSTN registration by the State Tax Officer (Circle), Ettayapuram. The cancellation was based on the petitioner failing to file GST monthly returns for six continuous months, as per Section 29 of the CGST Act, 2017. The petitioner contended that she was unaware of the cancellation due to being hospitalized for three months following an accident. Her business was managed by staff, and a part-time accountant handled statutory compliances. She only learned of the cancellation when informed by other taxpayers, which prevented her from filing an appeal within the stipulated time. The petitioner relied on previous High Court judgments in similar circumstances.

Key Issues

1. Whether the cancellation of the petitioner's GSTN registration is illegal and arbitrary, warranting its quashing and direction for revocation, considering the petitioner's circumstances preventing timely appeal filing? (Question of law and fact, turning on principles of natural justice and Section 29 of the CGST Act, 2017). Petitioner's Arguments: The petitioner argued that the cancellation was illegal and arbitrary due to her incapacitation from an accident, which prevented her from filing returns and subsequently an appeal within the prescribed time. She relied on the High Court's decision in Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others, which provided a framework for relief in similar situations, and subsequent consistent rulings by the Court. The revenue did not record any specific arguments against the petitioner's plea.