Muthu Subbiah Ayyadurai vs. The Commissioner Of Commercial Taxes

Held

The Court allowed the writ petition, extending the benefit granted in the case of Tvl. Suguna Cutpiece. The petitioner is directed to file all returns for the period prior to the cancellation of registration, along with any defaulted tax, interest, fine, and fees for belated filing, within 45 days. Payments of tax, interest, fine, or fees cannot be made from Input Tax Credit (ITC). Any unutilized ITC will remain so until scrutinized and approved by a competent officer. Approved ITC can then be used 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 may impose restrictions to prevent undue passing of ITC or bill trading. Upon payment of tax, penalty, and uploading of returns, the registration shall be revived forthwith. The respondents are also instructed to coordinate with GST Network to enable the petitioners to file returns and make payments. These steps are to be completed within 30 days of receiving the order. The Court followed its consistent view in Suguna Cutpiece and subsequent cases, noting the Revenue's acceptance of this position.

Facts

The petitioner, Muthu Subbuah Ayyadurai, filed a writ petition seeking to revoke the cancellation of his GST registration. The cancellation was initiated by the 3rd respondent (State Tax Officer) on January 29, 2022, due to the petitioner failing to file returns for six months. The petitioner appealed this cancellation to the 2nd respondent (Deputy Commissioner), which was rejected on August 24, 2022, as inadmissible. The petitioner's counsel submitted that the non-filing of returns was due to the petitioner's ill-health. The petitioner sought to quash the orders of cancellation and rejection of appeal and requested the restoration of his GST registration.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the 3rd respondent and the subsequent rejection of appeal by the 2nd respondent are illegal and arbitrary, warranting revocation and restoration of the registration? The petitioner argued that the cancellation of GST registration and the rejection of his appeal were illegal and arbitrary. He contended that his failure to file returns for six months was due to ill-health. He relied on a previous judgment of the High Court in Tvl. Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others (batch), which provided directions for similar circumstances. The petitioner also cited other consistent High Court decisions following the Suguna Cutpiece case, noting that the Revenue/Department had not appealed these decisions, indicating acceptance of the view. The respondents did not record any specific arguments in the judgment.