Case Law Details
Vinayaga Enterprises Vs Appellate Authority (Madras High Court)
In a recent case of Vinayaga Enterprises vs. Appellate Authority, the Madras High Court addressed the cancellation of GST registration due to non-filing of GSTR. The petitioner contested the cancellation and sought its revocation based on valid grounds.
The petitioner cited reasons for the inability to file returns promptly, attributing it to ill-health. Despite efforts to file returns and appeal against the registration cancellation in 2023, procedural limitations hindered their actions. The counsel for the petitioner referenced a previous court order in Marimuthu Venkateshwaran v. The Commissioner, advocating for a similar outcome in this case.
Mr. Rajnish Pathiyil, representing the respondents, acknowledged the petitioner’s plight but emphasized compliance with previously set conditions. Referring to the Suguna Cutpiece case, the senior counsel argued for the enforcement of specific directives before restoring registration.
The High Court, considering the submissions, decided not to delve into the case’s merits but instead issued directives akin to the Suguna Cutpiece judgment. These directives encompassed various conditions, including the timely filing of returns, payment of tax dues, and scrutiny of unutilized Input Tax Credit.
The Madras High Court’s verdict in Vinayaga Enterprises vs. Appellate Authority underscores the significance of adherence to GST regulations. While sympathizing with the petitioner’s circumstances, the court prioritized compliance with set conditions for registration restoration. This case serves as a reminder of the procedural intricacies involved in GST matters and the importance of timely compliance to avoid adverse legal implications.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The respective petitioner herein challenges an order of cancellation of registration and seeks revocation thereof.
2. By asserting that the respective petitioner could not file returns in time on account of ill-health, the present writ petitions were filed.
3. Learned counsel for the respective petitioner submits that the respective petitioner endeavoured to file GST returns and presented appeals against the cancellation of registration in 2023, but the appeals were not received on the ground of limitation. By placing reliance on an earlier order of this Court in Marimuthu Venkateshwaran v. The Commissioner 2022 Live Law (Mad) 494, learned counsel submits that a similar order be passed in this case.
4. Mr. Rajnish Pathiyil, learned senior standing counsel, accepts notice on behalf of the respondents. He submits that the order issued in Suguna Cutpiece v. The Appellate Deputy Commissioner (ST) (GST) and others (W.P.Nos.25048, 25877, 12738 of 2021 etc., batch) dated 31.01.2022 (Suguna Cutpiece), was a conditional order and that the respective petitioner should be directed to comply with all conditions stipulated therein.
5. In view of the said submissions, it is not necessary to adjudicate these matter on merits. Instead, by following the decision in Suguna Cutpiece, these writ petitions are disposed of by issuing the following directions:
i. The respective petitioner herein is directed to file returns for the period prior to the cancellation of registration, together with tax dues along with interest thereon and the fee fixed for belated filing of returns within a period of forty five (45) days from the date of receipt of a copy of this order.
ii. It is made clear that such payment of tax, interest, fine / fee and etc. shall not be allowed to be made or adjusted from and out of any Input Tax Credit which may be lying unutilized or unclaimed in the hands of the petitioners.
iii. If any Input Tax Credit has remained unutilized, it shall not be utilised until it is scrutinized and approved by an appropriate or competent officer of the Department.
iv. Only such approved Input Tax Credit shall be allowed to be utilized thereafter for discharging future tax liability under the Act and Rules.
v. The respective petitioner shall also pay GST and file the returns for the period subsequent to the cancellation of the registration by declaring the correct value of supplies.
vi. If any Input Tax Credit was earned, it shall be allowed to be utilised only after scrutinising and approving by the respondents or any other competent authority.
vii. On payment of tax, penalty and uploading of returns, the registration shall stand revived forthwith.
viii. The respondents shall take suitable steps by instructing GST Network, New Delhi to make suitable changes in the architecture of the GST Web portal to allow the respective petitioner to file the returns and to pay the tax / penalty / fine.
ix. The above exercise shall be carried out by the respondents within a period of thirty (30) days from the date of receipt of a copy of this order.
6. The restoration of the GST registration is subject to and conditional upon fulfilling the above conditions.
7. W. P.Nos,33227, 33230, 31495, 31500, & 33185 of 2023 are disposed of on the above terms. No costs. Consequently, connected miscellaneous petitions are closed.
Author Bio
