Case Title | Balaguru Kathiresan Vs The Superintendent Of Cgst And Central Excise |
Court | Madras High Court |
Honorable judges | Justice Mohammed Shaffiq |
Citation | 2022 (11) GSTPanzcea 565 HC Madras W.P(MD).No.26302 of 2022 |
Judgement Date | 22-November-2022 |
In this case, a writ petition has been filed contesting the cancellation of a Registration Certificate due to the petitioner’s failure to file Goods and Services Tax (GST) monthly returns for six consecutive months, leading to cancellation under Section 29 of the Central Goods and Services Tax Act, effective from 07.03.2022.
The petitioner argues through their counsel that they were unaware of the cancellation because their spouse was diagnosed with viral fever, requiring treatment and bed rest. Consequently, the petitioner couldn’t focus on their business, which was being managed by staff with only a part-time accountant handling statutory compliances, including GST returns filing. It was only after being informed by other taxpayers that the petitioner learned of their registration’s cancellation. Moreover, due to these circumstances, the petitioner couldn’t file an appeal within the stipulated timeframe against the registration cancellation.
In essence, the petitioner contends that the cancellation was due to extenuating circumstances beyond their control, primarily the health issues of their spouse, and requests relief from the cancellation order.
The writ petition in question challenges the cancellation of the Registration Certificate due to the petitioner’s failure to file Goods and Services Tax (GST) monthly returns for six consecutive months, leading to the cancellation effective from March 7, 2022, as per Section 29 of the Central Goods and Services Tax Act.
The petitioner argues through their counsel that they were unaware of the cancellation due to personal circumstances. Specifically, the petitioner’s spouse was diagnosed with a viral fever and required treatment and bed rest, which diverted the petitioner’s attention away from business matters. The day-to-day operations were managed by staff, with only a part-time accountant handling statutory compliances, including GST returns. The petitioner only became aware of the cancellation upon being notified by other taxpayers. Additionally, due to these extenuating circumstances, the petitioner missed the deadline to appeal the cancellation as stipulated by the Act.
Both the petitioner’s counsel and the respondents acknowledge a previous case, Tvl.Suguna Cutpiece Vs Appellate Deputy Commissioner (ST) (GST) and others, where the court issued directions in similar circumstances. In that case, the court allowed writ petitions subject to certain conditions, including:
1. The petitioners were directed to file returns for the period before the cancellation, along with any defaulted tax payments, interest, fines, and fees, within 45 days.
2. Payment of tax, interest, fines, and fees would not be allowed from any unutilized or unclaimed Input Tax Credit.
3. Any utilized Input Tax Credit would not be utilized until approved by a competent officer.
4. Only approved Input Tax Credit would be allowed for future tax liabilities under the Act and Rule.
These directions suggest a potential precedent for resolving the current petition, with the court likely to consider similar conditions for resolution.
This writ petition challenges the cancellation of a Registration Certificate due to the Petitioner’s failure to file Goods and Services Tax (GST) monthly returns for six consecutive months, as per Section 29 of the Central Goods and Services Tax Act. The Petitioner argues that they were unaware of the cancellation because of personal reasons, namely the illness of the Petitioner’s wife, which distracted them from business matters. The Petitioner also contends that they were informed of the cancellation only by other taxpayers, and thus couldn’t file an appeal in time.
Both the Petitioner and Respondents acknowledge previous court rulings, such as Tvl.Suguna Cutpiece Vs Appellate Deputy Commissioner (ST) (GST), where specific directions were issued in similar cases. These directions include filing returns for the period prior to cancellation, payment of outstanding taxes with interest and penalties, prohibition on using unutilized Input Tax Credit, scrutiny and approval of any utilized Input Tax Credit, declaration and payment of GST for subsequent periods in cash, and reviving registration upon compliance. The court also directed authorities to make necessary changes to the GST web portal to facilitate compliance.
These directions, issued by the court in previous cases, have become a precedent and are being consistently followed in similar matters.
The case involves a writ petition contesting the cancellation of a Registration Certificate due to the petitioner’s failure to file Goods and Services Tax (GST) monthly returns for six consecutive months, as per Section 29 of the Central Goods and Services Tax Act. The petitioner argues that they were unaware of the cancellation due to personal reasons, namely, the illness of the petitioner’s wife, which prevented them from focusing on business matters. They claim that only a part-time accountant was handling statutory compliance, and they only became aware of the cancellation upon notification by other taxpayers. Due to these circumstances, the petitioner couldn’t file an appeal within the stipulated time frame.
Both the petitioner and respondents agree that a previous court ruling in a similar case, Tvl.Suguna Cutpiece vs. Appellate Deputy Commissioner, issued specific directions for such situations. These directions included requirements for filing returns for the period before cancellation, paying outstanding taxes, fines, and fees, and not allowing adjustment of any unutilized Input Tax Credit. The ruling also mandated scrutiny and approval of any utilized Input Tax Credit and payment of GST in cash for subsequent periods. Additionally, the respondents were instructed to make necessary changes to facilitate compliance within specified time frames.
The respondents argue that the appellate authority cannot deviate from these limitations and thus reject the petitioner’s appeal due to it being beyond the prescribed time limit. However, considering the consistent application of the earlier court rulings, the court deems it appropriate to extend the benefits granted in those cases to the petitioner.
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