Gupta Comfort Industries Through Proprietor Smt Anuja Gupta vs. The State Of Madhya Pradesh

Held

The Court held that while the petitioner's grievance about not being given sufficient opportunity of hearing was not entirely accurate, as a show cause notice was issued and the appeal was dismissed on delay, the petitioner was facing adversity and wished to re-enter the tax regime. The Court found it to be in the interest of both the department and the revenue to bring the petitioner back into the formal economy to ensure regular tax collection. Consequently, the impugned orders dated 29.09.2025 and 17.09.2024 were set aside. The petitioner was directed to submit all pending GST returns, especially for the period when registration was cancelled. Upon submission of these returns, the authority was to consider the case for revocation of registration, if legally permissible. As a consequence of the default, the petitioner was directed to pay a cost of Rs. 50,000/- to the department along with the pending returns. The order was passed in the peculiar facts and circumstances of the case.

Facts

The petitioner, Gupta Comfort Industries, a registered dealer under the GST Act, failed to pay attention to filing GST returns for six continuous months due to a mistake by their Chartered Accountant. This led to the cancellation of their GST registration by the Dy. Commissioner, State Tax, Gwalior Division on 17.09.2024. The petitioner's appeal against this cancellation was rejected by the appellate authority on 29.09.2025, primarily on grounds of delay. The petitioner contended that they were not given a sufficient opportunity of hearing. However, the Court noted that a show cause notice was issued on 12.08.2024, and the appeal was dismissed on delay, not on the merits of the opportunity for hearing.

Key Issues

1. Whether the petitioner was afforded sufficient opportunity of hearing prior to the cancellation of their GST registration, as required under the relevant provisions of the Central Goods and Services Tax Act, 2017 and Rules, 2017? The petitioner argued that they were not given adequate opportunity to explain their reasons for non-furnishing returns. The respondents, referring to Section 25, 29, and 30 of the CGST Act and Rules 21(a), (h), 22, and 23 of the CGST Rules, contended that the petitioner was given sufficient opportunity of hearing and could apply for fresh registration. 2. Whether the impugned orders cancelling registration and rejecting the appeal should be set aside in the peculiar facts and circumstances of the case, considering the petitioner's willingness to regularize their tax compliance and the potential benefit to the revenue? The petitioner expressed a willingness to pay costs and be given a chance for revocation. The revenue argued for adherence to the existing provisions.