Abound It Serivices Vs State of Gujarat & Ors. (Gujarat High Court)
GST registration cancellation on account of non-filing of returns is impermissible where tax liability discharged
The Gujarat High Court held that cancellation of GST registration solely for non-filing of returns is impermissible when the taxpayer has already discharged the full tax liability along with interest and late fees. In this case, the petitioner had paid all dues for March to May 2024 through the Electronic Cash Ledger but failed to file the returns, leading to the issuance of a show-cause notice and cancellation of registration under Section 29(2)(c) of the CGST Act. The appellate authority upheld the cancellation, prompting the petitioner to file a writ petition. The Court noted that since the tax, interest, and penalties had already been deposited, the petitioner should be permitted to file the pending returns. It directed the authorities to process the returns and, if any additional demand arises, the petitioner must pay it immediately, after which the cancellation will stand revoked. The ruling emphasizes that payment of tax liability mitigates the consequences of delayed return filing.
Facts:
M/s Abound It Services (“the Petitioner”) paid the GST along with the late fees and penalty for the period March 2024 to May 2024, however, could not file the GST return for the said period. Therefore, the Adjudicating authority issued a Show Cause Notice (“SCN”) on July 3, 2024, and subsequently, an order for cancellation of GST registration (“Impugned order”), citing non-filing of the GST returns under section 29(2)(c) of the Central Goods and Services Act, 2017 (“the CGST Act”). The petitioner appealed against the impugned order before the appellate authority, but it was also rejected. Aggrieved, the petitioner filed the present writ petition.
