M/S Veer Construction vs. The State Of Madhya Pradesh

Held

The Court held that while the GST Act and Rules are strictly applicable, the business should continue to generate revenue for the government. The Court acknowledged that the petitioner is still in the construction business and faces delays in payments with GST deductions on government contracts. Permanent cancellation of registration would lead to the loss of input tax credit and refunds for the petitioner, while continued registration would ensure revenue for the government. Citing a recent Division Bench order in W.P No.29802 of 2025 (Ms. K.N Developers And Buildcon Pvt. Ltd. Vs. State of Madhya Pradesh), which permitted submission of pending returns and consideration for revocation with a cost, the Court found it in the interest of justice to set aside both the cancellation order and the appellate order. The matter was remitted back to the GST authorities. The petitioner was directed to physically submit all pending returns, after which the competent authority would consider the application for revocation or cancellation of GST registration. The petition was allowed with a cost of Rs. 50,000/- payable to the respondent/State.

Facts

The petitioner, M/s Veer Construction, filed a writ petition challenging the cancellation of its GST registration and the subsequent dismissal of its appeal. The GST registration was cancelled on March 7, 2024, due to non-filing of final returns (FORM GSTR-10) for several consecutive months. A show-cause notice was issued on February 5, 2024, to which the petitioner did not respond. The petitioner filed an appeal for revocation of registration on June 17, 2025, citing health reasons for the delay. The appellate authority dismissed the appeal on September 30, 2025, on grounds of delay and non-appearance on multiple dates. The petitioner argued that the cancellation order was passed ex parte without effective service of the show-cause notice, as it was only uploaded on the GST portal and not physically received. The revenue contended that the petitioner was negligent in filing returns and appearing before authorities, and there is no provision to condone delay beyond the statutory period.

Key Issues

1. Whether the cancellation of GST registration was in violation of the principles of natural justice due to alleged non-receipt of the show-cause notice, and if uploading on the GST portal constitutes effective service (turning on principles of natural justice and rules of service of notice). 2. Whether the appellate authority erred in dismissing the appeal solely on the grounds of delay and non-appearance, without considering the petitioner's submissions regarding health reasons and the potential loss of input tax credit (turning on Section 107 and Section 108 of the GST Act and principles of condonation of delay). Petitioner's arguments: The cancellation order was ex parte and violated natural justice as the show-cause notice was not physically received. The tax consultant also failed to track the notice. Revival of registration is necessary to claim input tax credits and GST deducted on pending bills. Reliance was placed on W.P No.11572/2025 (M/s Light Group Vs. The State of Madhya Pradesh & other) regarding ignorance of notice. Revenue's arguments: The petitioner was negligent in filing GST returns and failed to appear before the Superintendent and the appellate authority on multiple dates. The appeal was rightly dismissed as barred by limitation, as there is no provision for condoning delay beyond the statutory period.