M/S.Atheefa Mathiyastha Kadai Jewellery vs. The Assistant Commissioner (St)

Held

The Court held that the petitioner was entitled to be considered for the benefit of Notification No.03/2023-Central Tax dated 31.03.2023, as they were unaware of the notification and had not availed its benefits. The Court noted that the petitioner's cancellation date was 31.07.2022, and the notification granted an extension for taxpayers whose cancellation was on or before 31.12.2022. The Court also found that the issue was covered by the judgment in Tvl. Suguna Cut Piece’s case, which condoned delays in revoking cancelled GSTN registrations. The Court reasoned that the petitioner had filed returns up to January 2023 and was willing to pay the necessary late fees and taxes. The Court quashed the impugned order dated 25.08.2022 and directed the respondent to restore the petitioner's GST registration. The petitioner was further directed to file the returns and pay tax and penalty as per law after restoration. The Court found no reason to keep the issue undecided.

Facts

The petitioner, M/s.Atheefa Mathiyastha Kadai Jewellery, filed a writ petition seeking to quash the order dated 25.08.2022 passed by the Assistant Commissioner (ST), Tenkasi Assessment Circle, cancelling its GST registration (GSTIN/UIN: 33BHXPM6489C1ZR). The cancellation was based on the petitioner's failure to file GST returns for six months and not responding to a show cause notice. The petitioner contended that the failure was due to their accountant's negligence and their own ill health, leading to financial losses. They also argued that the period from 13.03.2020 to 28.02.2022 should be excluded for limitation purposes, citing a Supreme Court order and a Madras High Court judgment in Tvl.Suguna Cut piece. The petitioner further submitted that they were unaware of Notification No.03/2023-Central Tax dated 31.03.2023, which extended the time for taxpayers to file returns up to 30.06.2023 for those whose cancellation date was on or before 31.12.2022. The petitioner had already filed returns up to January 2023 and was willing to pay late fees and taxes.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the respondent on 25.08.2022 for non-filing of returns for six months and non-response to the show cause notice is liable to be quashed, considering the petitioner's submission of bona fide reasons including ill health and accountant's negligence, and the subsequent filing of returns up to January 2023 with willingness to pay late fees and taxes? (Question of mixed law and fact, turning on principles of natural justice and GST law regarding cancellation of registration). 2. Whether the petitioner is entitled to the benefit of Notification No.03/2023-Central Tax dated 31.03.2023, which extended the time for filing returns, despite the cancellation order being dated 25.08.2022, given the petitioner's claim of unawareness of the notification and the Supreme Court's suo motu extension of limitation periods? (Question of law, turning on the interpretation and applicability of the notification and judicial pronouncements on limitation). Petitioner's arguments: The petitioner argued that the cancellation order was bereft of details and that their failure to respond was due to bona fide reasons. They relied on the Supreme Court's suo motu order and the Madras High Court's judgment in Tvl.Suguna Cut piece to argue for exclusion of the period from 13.03.2020 to 28.02.2022 for limitation. They also contended that they were unaware of Notification No.03/2023-Central Tax and thus could not avail its benefits, despite their cancellation date being after the notification's cut-off for eligibility. They expressed willingness to pay all dues if registration was restored. Respondent's arguments: The respondent argued that the petitioner had not responded to the show cause notice nor appeared for a personal hearing, making the registration liable for cancellation.