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September 7, 2022

HC allows revocation of cancellation of GST registration after expiry of statutory limitation of time

by CA Shivam Jaiswal in GST, Legal Court Judgement

HC allows revocation of cancellation of GST registration after expiry of statutory limitation of time

Facts and Issue of the Case

The learned counsel appearing for the petitioner submitted that the petitioner is the proprietor of M/s.Pearl and Co and he is having registration No.GSTIN 33ASLPG6104C1ZB. The petitioner used to purchase materials from both registered and unregistered dealers and the same were used in the execution of works contract. Further, the petitioner used to engage private accountant for the purpose of filing returns and who alone had the access to the GST portal for filing returns.

The petitioner used to furnish all the invoices, purchase and sales transactions particulars to the part time accountant, who uploaded monthly returns, GSTR-3B returns within the due dates and have also made payment of GST within time. This being so, the petitioner was severely affected by stomach pain and he had taken medical treatment, which was latterly diagnosed as Hernia and hence, he had undergone surgery and bed rest for several months.

During this period, the civil work, undertaken by the petitioner were only executed to a limited extent and the staff not uploaded the progress of work and hence, the returns could not be filed. During the month of July 2022, the GSTIN registration was cancelled. Therefore, they were unable to avail Input Tax Credit. He further submitted that the show cause notice, dated 05.01.2022, was issued by the second respondent. Due to cancellation of GSTIN registration, the petitioner is unable to carry on his business.

He further submitted that by restoring the registration number, the state would benefit by receiving the tax components. The petitioner attempted to file a representation to revoke the cancellation of registration. The same was not accepted, since the request for revocation is not filed within the statutory period of 90 (30+60) days. The representation for revocation of cancellation of registration could not be done. He further submitted that the Principal Secretary/Commissioner of Commercial Taxes vide proceedings, dated 07.04.2022 citing the order of the Hon’ble Apex Court directed all the its officials of the department to direct the proper officers to exclude the period from 15.03.2020 to 28.02.2022 for the purpose of computing the limitation. Further, in support of his contention, he submitted that on similar circumstances in several cases, this Court condoned the delay.

The learned Government Advocate appearing for the respondents submitted that the petitioner though, initially registered with department thereafter failed to upload the monthly returns regularly. As per Section 29(2) TNGST Act, the person who fails to file the return for a continuous period of six months, his registration automatically cancelled. He further submitted that a show cause notice, dated 05.01.2022, was issued by the second respondent. The petitioner failed to respond to the same and thereafter, the registration was cancelled. Hence, he prayed for dismissal of the writ petition.

Observation by the Court

The Court is of the view that restoring the registration would not cause any harm to the department on the other hand it would be beneficial for the state to earn revenue. There some of the petitioner filed an appeal beyond the period of limitation either for filing application for revocation of cancellation, while some of them had directly filed a writ petition against the order cancelling the registration. While some of them filed appeal beyond the statutory period of limitation, there was further delay in filing the writ petition. However, considering the over all facts and circumstances of the case, it was held that no useful purpose will be served by keeping those petitioners out of the Goods and Services Tax regime, as such assessee would still continue to do business and supply goods/services. By not bringing them back to the Goods and Services Tax fold/regime, would not further the interest of the revenue. This Court inclined to allow this writ petition in terms of the above safeguards. Accordingly, this writ petition is allowed subject to the above conditions. No costs.


The writ petition is closed.


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