Ramalingam Chellapppa Vs Superintendent (Madras High Court)
Summary: The Madras High Court set aside an order dated 20.02.2023 cancelling the petitioner’s GST registration and directed the Department to restore the registration, subject to compliance with the conditions laid down in Tvl. Suguna Cutpiece Center Vs Appellate Deputy Commissioner (ST) (GST). The writ petition was disposed of at the admission stage with the consent of both sides.
The petitioner, Ramalingam Chellapppa, challenged the cancellation order bearing Reference No. ZA330223100840B dated 20.02.2023, under which his GST registration had been cancelled with effect from the same date. The petitioner sought quashing of the cancellation order and restoration of his GST registration.
Both the petitioner’s counsel and the Senior Standing Counsel for GST and Customs submitted that the controversy was squarely covered by the Madras High Court’s earlier decision in Tvl. Suguna Cutpiece Center, decided on 31.01.2022. The Court therefore reproduced the operative conditions prescribed in that judgment.
Under those conditions, pending returns for the period prior to cancellation are required to be filed together with unpaid tax, applicable interest, fine and fee within the prescribed period. Such tax and other dues cannot be adjusted against unutilized or unclaimed Input Tax Credit. Unutilized or subsequently earned ITC can be used only after scrutiny and approval by the competent authority. Returns for the period subsequent to cancellation are also required to be filed and the corresponding GST is to be paid in cash.
The earlier directions further permit the Department to impose appropriate safeguards against undue passing of ITC or bill trading. Upon payment of tax and penalty and uploading of the required returns, the registration is to stand revived. Necessary steps are also required to be taken to enable compliance through the GST portal.
Applying that precedent, the High Court set aside the impugned cancellation order and directed restoration of the petitioner’s GST registration subject to compliance with the conditions imposed in Tvl. Suguna Cutpiece Center. The writ petition was accordingly disposed of without costs and the connected miscellaneous petition was closed.
Cases Discussed
- Tvl. Suguna Cutpiece Center Vs Appellate Deputy Commissioner (ST) (GST) (Madras High Court), W.P.Nos.25048, 25877, 12738 of 2021 etc. batch, decided on 31.01.2022 — Followed. Both sides agreed that the controversy was squarely covered by this decision; the High Court set aside the cancellation and ordered restoration subject to the conditions prescribed therein.
FULL TEXT OF THE ORDER OF MADRAS HIGH COURT
This Writ Petition is disposed of at the time of admission with the consent of the learned counsel for the petitioner and learned Senior Standing Counsel (GST & Customs) for the respondent.
2. The petitioner has challenged the impugned order dated 20.02.2023 bearing reference in Reference Number. ZA330223100840B, cancelling GST registration of the petitioner with effect from 20.02.2023.
3. The learned counsel for the petitioner as well as the learned Senior Standing Counsel (GST & Customs) for the respondent submit that the issue is squarely covered by decision rendered by this Court in the case of Tvl.Suguna Cutpiece Center Vs. Appellate Deputy Commissioner (ST) (GST) and others, in W.P.Nos.25048, 25877, 12738 of 2021 and etc., batch (decided on 31.01.2022), wherein this Court had ordered as follows:
229. In the light of the above discussion, these Writ Petitions are allowed subject to the following conditions:-
i. The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid.
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 these petitioners.
iii. If any Input Tax Credit has remained utilized, it and etc. batch shall not be utilised until it is scrutinized and approved by an appropriate or a competent officer of the Department.
iv. Only such approved Input Tax Credit shall be allowed for being utilized thereafter for discharging future tax liability under the Act and Rule.
v. The petitioners 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 and payment of GST shall also be in cash.
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. The respondents may also impose such restrictions / limitation on petitioners as may be warranted to ensure that there is no undue passing of Input Tax Credit pending such exercise and to ensure that there is no violation or an attempt to do bill trading by taking advantage of this order.
viii. On payment of tax, penalty and uploading of returns, the registration shall stand revived forthwith.
ix. The respondents shall take suitable steps by instructing GST Network, New Delhi to make and etc. batch suitable changes in the architecture of the GST Web portal to allow these petitioners to file their returns and to pay the tax/penalty/fine.
x. 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.
xi. No cost.
xii. Consequently, connected Miscellaneous Petitions are closed.”
4. Under these circumstances, the impugned order is set aside and the respondent is directed to restore the GST registration subject to the petitioner complying with the conditions imposed in Tvl.Suguna Cutpiece Center’s case (cited supra).
5. This Writ Petition is disposed of, with the above observations. No costs. Consequently, connected miscellaneous petition is closed.
