Mary Constructions vs. The Principal Secretary / Commissioner Of Commercial Taxes

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 should file returns for the period prior to the cancellation, along with any defaulted tax, interest, fine, and fees, within 45 days of receiving the order. It was clarified that these payments could not be made from Input Tax Credit (ITC). Any unutilized ITC would require scrutiny and approval by a competent officer before it could be used for future tax liabilities. The petitioner was also required to pay GST and file returns for the period subsequent to cancellation, with payments made in cash. The respondents were directed to revive the registration forthwith upon payment of tax, penalty, and uploading of returns, and to take steps to enable the petitioner to file returns and pay taxes on the GST portal. The entire exercise was to be completed by the respondents within 30 days of receiving a copy of the order.

Facts

The petitioner, Mary Constructions, filed a writ petition challenging the cancellation of its GST registration by the State Tax Officer, Nanguneri Circle, with effect from 04.02.2020. 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 contended that it was unaware of the cancellation due to medical ailments related to COVID-19, which prevented timely appeal filing. The petitioner sought to quash the cancellation order and direct the respondents to activate its GSTIN for tax payment.

Key Issues

1. Whether the cancellation of GST registration under Section 29 of the Central Goods and Services Tax Act, 2017, for non-filing of returns for a continuous period of six months, can be set aside on grounds of the petitioner's medical incapacitation preventing timely appeal. Petitioner's contention: The petitioner argued that due to medical reasons (COVID-19 related ailments and treatment), it was unable to file returns and subsequently could not file an appeal within the stipulated time against the cancellation order. The petitioner relied on previous judgments of the High Court in similar circumstances, specifically citing the case of Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner (ST) (GST) and others, which provided a framework for revival of registration under such conditions. Revenue's contention: The judgment does not record any specific arguments made by the respondents (Revenue).