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The Hon’ble Madras High Court in the matter of Raj Kishore Engineering Construction (P.) Ltd. v. Joint Commissioner (Appeals) II [W.P. No. 32740 of 2022 with W.M.P. No. 32128 of 2022 dated December 6, 2022] held that revocation of the Goods and Service Tax (“GST”) registration without any explanation and only reason that the returns were filed late is not sustainable for cancellation of the GST registration.


Raj Kishore Engineering Construction (P.) Ltd. (“the Petitioner”) filed the writ petition against the Order-in-Appeal (“OIA”) whereby the Adjudicating Authority upheld the Order-In-Original  (“OIO”) passed by the Assessing Officer (“AO”) of cancelling the GST registration of the Petitioner.

The Petitioner is in the business of providing works contract service, civil works, ground levelling and cleaning services. The Petitioner was availing Input Tax Credit (“ITC”) and was utilizing the same to pay for the tax liability under the Central Goods and Service Tax Act, 2017 (“the CGST Act”). The Petitioner failed to file GSTR-3B for the period from March 2020 to December 2020 and therefore could not pay the applicable tax liability. The AO issued a Show Cause Notice (“SCN”) dated November 15, 2021 to the Petitioner alleging the default under Section 46 of the CGST Act and asked the Petitioner to file reply within 15 days. The Petitioner  failed to furnish the reply and the AO had resorting to Best Judgment Assessment cancelled the Registration of the Petitioner vide an OIO dated December 13, 2021. The Petitioner appealed against the OIO to the Appellate Authority, which after giving an opportunity to be heard to the Petitioner rejected the appeal and upheld the OIO.

The Petitioner contended that it was unable to file the returns owing to the Corona virus pandemic and the consequent lockdown. Moreover, as the Registration of the Petitioner was cancelled so it could not file returns at a later stage. On the other hand, the Respondent has contended that it had taken note of the submissions of the Petitioner but negated the appeal on the grounds that the returns were not filed within the prescribed time.


Whether the GST Registration of the Petitioner can be cancelled merely on the grounds that returns were filed late?


The Hon’ble Madras High Court held as under:

  • The cancellation of the GST Registration of the Petitioner was the reason it was unable to file the returns.
  • The Respondent should have given a dispositive reasoning on why the registration of the Petitioner was revoked and that the Respondent has the power to consider the facts of the case.
  • Cancellation of the GST registration just because the returns were filed late, without providing a proper explanation, is not valid, and the case needs to be reviewed again with all available information. Hence, remanded the matter back to the Respondent.
  • Directed the Respondents to decide the matter on merits and based on the opportunity already given to the Petitioner within a period of three weeks.


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June 2024