2025 (7) TMI 273 - HC - GST

Cancellation of GST registration of the petitioner - cancellation for the reason of auto-generated details of your inward supplies for the period from 13.09.2022 to 20.09.2022 - HELD THAT - Considering that the grievances in this writ petition is for a direction to revoke the cancellation of the GST registration and on payment of the tax amount due to the petitioner and also taking note in M/S. W.G. RESORTS (ASSAM) PRIVATE LIMITED VERSUS UNION OF INDIA AND 3 ORS 2022 (9) TMI 1668 - GAUHATI HIGH COURT covers the case of the petitioner. Accordingly this writ petition is disposed of by directing the respondent authorities to restore the GST registration of the petitioner on filing the return along with the deposit of the statutory dues by the petitioner in accordance with the applicable Rules. The revocation of the cancellation of GST registration shall be carried out as expeditiously as possible but not later than 25 days from today and the respondent No. 3 shall intimate the petitioner as regards the outstanding statutory dues as payable so as to enable the petitioner to file return if any. It is made clear that similar benefit is granted to the petitioner subject to the payment of all the dues including prior to cancellation of GST registration. Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter are:

• Whether the cancellation of the petitioner's GST registration by the Superintendent of Taxes was valid and justified under the Arunachal Pradesh Goods and Services Tax Act, 2017, given the alleged failure to file returns and pay statutory dues.
• Whether the petitioner is entitled to revocation of the cancellation of GST registration upon filing of returns and payment of outstanding statutory dues.
• Whether the precedent set by a coordinate bench in a similar writ petition (involving cancellation of GST registration for non-filing of returns) applies to the petitioner's case despite factual differences.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of Cancellation of GST Registration

Relevant Legal Framework and Precedents: The cancellation was ordered under the provisions of the Arunachal Pradesh Goods and Services Tax Act, 2017, specifically concerning non-filing of GST returns and non-payment of dues. The GST Rules, 2017, particularly Rule 23, govern the filing of returns and payment of tax dues. The Court also considered the order dated 29.09.2022 passed by a coordinate bench in a writ petition involving similar facts.

Court's Interpretation and Reasoning: The Court noted that the Superintendent of Taxes issued a Show-Cause Notice directing the petitioner to explain why the GST registration should not be cancelled due to auto-generated details indicating non-filing of returns for the period 13.09.2022 to 20.09.2022. The petitioner was given an opportunity to respond and file returns within stipulated time. Despite this, the GST registration was cancelled effective 13.09.2022.

Key Evidence and Findings: The respondent contended that the petitioner failed to respond to the Show-Cause Notice and did not file returns till the cancellation. Contrarily, the petitioner asserted that returns were filed and dues paid in compliance with Rule 23 GST Rules, 2017, prior to the cancellation.

Application of Law to Facts: The Court observed that the cancellation was premised on non-compliance with statutory obligations under the GST Act and Rules. However, the petitioner's claim of having filed returns and paid dues, if substantiated, would negate the grounds for cancellation.

Treatment of Competing Arguments: The Court acknowledged the respondent's argument about factual differences from the coordinate bench's precedent, emphasizing the petitioner's alleged failure to respond and file returns. However, the petitioner's submission of compliance was also considered.

Conclusions: The Court found that the cancellation order was subject to the petitioner's compliance with filing returns and payment of statutory dues. The petitioner's entitlement to relief hinged on fulfilling these conditions.

Issue 2: Applicability of Coordinate Bench Precedent and Entitlement to Revocation

Relevant Legal Framework and Precedents: The Court relied on the earlier order dated 29.09.2022 by a coordinate bench in a writ petition involving cancellation of GST registration for non-filing of returns, which held that registration cancellation could be revoked upon compliance with statutory requirements.

Court's Interpretation and Reasoning: The Court held that although there were slight factual differences, the principle laid down by the coordinate bench was applicable. The petitioner's case was covered by the precedent, entitling the petitioner to have the cancellation revoked upon filing returns and payment of dues.

Key Evidence and Findings: The petitioner's claim of having filed returns and paid dues was crucial. The Court directed the respondent authorities to intimate the petitioner regarding outstanding dues to facilitate compliance.

Application of Law to Facts: The Court applied the principle that cancellation of GST registration for non-filing of returns is not absolute and can be revoked if the taxpayer subsequently complies with statutory obligations.

Treatment of Competing Arguments: The Court balanced the respondent's contention about factual differences with the petitioner's compliance and the binding nature of coordinate bench precedent.

Conclusions: The Court concluded that the petitioner is entitled to restoration of GST registration subject to filing of returns and payment of all statutory dues.

3. SIGNIFICANT HOLDINGS

The Court's crucial legal reasoning is encapsulated in the following directions and principles:

"The revocation of the cancellation of GST registration shall be carried out as expeditiously as possible but not later than 25 days from today and the respondent No. 3 shall intimate the petitioner as regards the outstanding statutory dues as payable so as to enable the petitioner to file return, if any. It is made clear that similar benefit is granted to the petitioner subject to the payment of all the dues including prior to cancellation of GST registration."

Core principles established include:

• Cancellation of GST registration for non-filing of returns is not irrevocable and may be revoked upon compliance with statutory requirements.
• Taxpayers must be given an opportunity to comply with filing returns and payment of dues before or even after cancellation.
• Precedents of coordinate benches are binding and applicable unless materially distinguishable.

Final determinations:

• The cancellation of the petitioner's GST registration was set aside on the condition that the petitioner files the outstanding returns and pays all statutory dues as per applicable Rules.
• The respondent authorities were directed to restore the GST registration within a specified timeframe and to communicate outstanding dues to the petitioner.
• The writ petition was disposed of accordingly, granting relief subject to compliance.