Sakthivel vs. The Commissioner Of Commercial Taxes

Held

The Court allowed the writ petition, extending the benefit granted in the case of Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others. The operative directions, as per paragraph 229 of the Suguna Cutpiece order, were applied. These directions mandate the petitioner to file all pending returns prior to the cancellation of registration, along with payment of defaulted tax, interest, fine, and fees. Such payments are explicitly not to be made or adjusted from any unutilized Input Tax Credit (ITC). Any utilized ITC will require scrutiny and approval by a competent officer before it can be used for future tax liabilities. The petitioner must also pay GST and file returns for the period subsequent to cancellation in cash. The respondents are directed to impose necessary restrictions to prevent undue passing of ITC or bill trading. Upon compliance, the registration shall stand revived forthwith. The GST Network is to be instructed to make necessary changes to the portal to facilitate filing and payment for these petitioners. The respondents are to complete this exercise within thirty days of receiving a copy of the order. No costs were awarded.

Facts

The petitioner, Sakthivel, filed a writ petition challenging the order dated 24.01.2022 passed by the second respondent, the State Tax Officer, cancelling the petitioner's GST registration. The cancellation was based on the petitioner's failure to file Goods and Services Tax monthly returns for a continuous period of six months, as per Section 29 of the Central Goods and Services Tax Act, 2017. The petitioner's counsel submitted that the proprietor was severely affected by ill-health due to COVID-19, leading to prolonged bed rest, which prevented timely filing of an appeal against the cancellation order. The petitioner sought to quash the cancellation order and direct the respondents to revoke it.

Key Issues

1. Whether the cancellation of GST registration under Section 29 of the Central Goods and Services Tax Act, 2017, for failure to file returns for six consecutive months, is liable to be quashed on grounds of ill-health preventing timely appeal filing? The petitioner argued that due to severe ill-health caused by COVID-19, they were unable to file their returns and consequently could not file an appeal within the stipulated time against the cancellation of their GST registration. The petitioner relied on a previous judgment of this Court in 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, which provided directions for revival of registration in similar circumstances. The petitioner contended that this Court has consistently followed the directions issued in the Suguna Cutpiece case, and the Revenue/Department has accepted this view by not filing appeals. The respondents did not record any specific arguments against the petitioner's plea.