Surya Build Creations vs. Commissioner State Goods And Services Tax

Held

The Court agreed with the view taken by the Andhra Pradesh High Court that filing of NIL returns is not a ground contemplated under Sub-Section (2) of Section 29 of the GST Act for cancellation of registration. Consequently, the Court held that the impugned show cause notice and the order passed in pursuance thereof, which cancelled the petitioner's registration on this ground, could not survive. The Court's reasoning was that the statutory provision for cancellation of registration did not include the act of filing NIL returns as a permissible ground. Therefore, the cancellation order was quashed. The ratio decidendi is that a GST registration cannot be cancelled solely on the basis of filing NIL returns, as this is not a ground provided for in Section 29(2) of the Act. The writ petition was allowed, and the registration cancellation order was quashed.

Facts

The petitioner, Surya Build Creations, filed a writ petition challenging a show cause notice dated January 29, 2025, and the subsequent order dated February 17, 2025, which cancelled its GST registration. The cancellation was based on the ground of "filing NIL return since last two years." The petitioner argued that filing NIL returns is not a statutory ground for cancellation of registration. The respondents are the Commissioner, State Goods and Services Tax, and another authority.

Key Issues

1. Whether filing NIL returns for two consecutive years constitutes a valid ground for cancellation of GST registration under Section 29(2) of the GST Act? The petitioner contended that Section 29(2) of the GST Act enumerates specific circumstances under which registration can be cancelled, and filing NIL returns is not among them. The petitioner relied on the Andhra Pradesh High Court's judgment in Kali Shanker Enterprises vs. Additional Commissioner, Goods and Service Tax Officer, which supported this interpretation. The respondents did not record any arguments in the judgment.