Dsk Engineering Works vs. The Assistant Commissioner (St)

Facts

The petitioner, DSK Engineering Works, filed a writ petition challenging an order dated 08.09.2025, which cancelled its GST registration. The cancellation was based on a show cause notice dated 30.07.2025, alleging that the petitioner had not filed GST monthly returns regularly. The petitioner contended that the cancellation caused immense hardship and sought revocation. The respondent, the Assistant Commissioner (ST), argued that the cancellation was justified due to the non-filing of returns. The respondent also noted that a previous judgment, Suguna Cutpiece v. Appellate Deputy Commissioner (ST)(GST), involved conditional restoration of GST registration.

Held

The Court held that the GST registration cancellation, based on non-filing of returns, could be revoked subject to the petitioner complying with the conditions laid down in the case of Suguna Cutpiece v. Appellate Deputy Commissioner (ST)(GST). The Court adopted the directions from the Suguna Cutpiece judgment, which mandated the petitioner to file all pending returns prior to cancellation, along with tax dues, interest, and belated filing fees within 45 days. Crucially, payments could not be made from unutilized Input Tax Credit (ITC) until it was scrutinized and approved. Similarly, any remaining ITC could only be utilized after approval. The petitioner was also required to file returns and pay GST for the period subsequent to cancellation. The Court directed that upon fulfillment of these conditions, the registration would stand revived, and the respondent was to facilitate the process through the GST Network within 30 days. The ratio is that non-filing of returns, while grounds for cancellation, does not preclude restoration if stringent conditions for compliance and rectification are met, ensuring tax dues are settled and ITC is properly managed.

Key Issues

1. Whether the cancellation of GST registration for non-filing of returns is justifiable, and if so, under what conditions can it be revoked? The petitioner argued that the cancellation of its GST registration was causing immense hardship and should be revoked. It relied on the judgment in Suguna Cutpiece v. Appellate Deputy Commissioner (ST)(GST) as precedent. The respondent argued that the cancellation was on account of the petitioner's failure to file returns regularly. The respondent further contended that the Suguna Cutpiece judgment was conditional and that the petitioner should be directed to comply with all stipulated conditions for restoration.