Case Law Details
Venkateswara Medical Vs Commercial Tax Officer (Madras High Court)
The Madras High Court addressed a writ petition filed by Venkateswara Medical, challenging the cancellation of its Goods and Services Tax (GST) registration. The cancellation was based on the petitioner’s failure to file statutory returns for a continuous period of six months, invoking Section 29(2) of the Central Goods and Services Tax (CGST) Act. The petitioner’s counsel argued that returns had been filed and taxes paid, with a willingness to settle any outstanding dues, including late fees and interest. The court acknowledged that similar cases had been previously adjudicated, notably in Suguna Cut piece Center Vs. Appellate Deputy Commissioner (ST) (GST) and others. In those prior judgments, the court had directed the revocation of registration cancellations, subject to specific compliance conditions.
The court referenced the established precedent from Suguna Cut piece Center, outlining the conditions for registration revival. These conditions mandate that petitioners file all outstanding returns, pay any unpaid taxes, interest, and penalties within 45 days. Crucially, these payments cannot be made using existing Input Tax Credit (ITC). Any existing ITC is subject to scrutiny and approval by tax authorities before utilization. The court also requires that GST and returns for the period following cancellation be filed, with GST paid in cash. The court emphasized the need for careful review of ITC claims to prevent misuse, including potential bill trading. The order instructs the tax department to make necessary adjustments to the GST portal to enable petitioners to comply with the revival conditions. The court directed that the exercise of implementing the conditions be completed within 30 days. Based on these established precedents, the court extended the same benefits to Venkateswara Medical, disposing of the writ petition without costs and closing the related miscellaneous petitions.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Heard Ms. E. Ann Priscilla Swarna Kumari, learned counsel for the petitioner and Mr. R. Suresh Kumar, learned Additional Government Pleader for the respondents.
2. The present Writ Petition is filed challenging the order of the cancellation of the registration of the petitioner on the premise that the statutory returns has not been filed for a continuous period of six months, thereby invoking Section 29(2) of CGST Act.
3. It is submitted by the learned counsel for the petitioner that the returns have been filed and the appropriate taxes have also been paid and the petitioner is ready to pay any further taxes that may be due, alongwith late fee and interest, as required under GST
4. At the outset, it is submitted by both the learned Counsel for the petitioner as well as the learned Additional Government Pleader for the respondents that the issue stands covered by a series of judgments, commencing with the decision in Suguna Cutpiece Center Vs. Appellate Deputy Commissioner (ST) (GST) and others, wherein, under identical circumstances, this Court has directed the revocation of registration subject to conditions.
5. This Court has been consistently following the directions issued in Suguna Cutpiece Center’s case. Relevant portion of the order is extracted hereunder:
“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 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
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.
viii. On payment of tax, penalty and uploading of returns, the registration shall stand revived
ix. 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 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.”
6. In view thereof, the benefit extended by this Court vide its earlier order in Suguna Cut piece Centre‘s case cited supra, may be extended to the petitioner.
7. Accordingly, this Writ Petition is disposed of on the above terms. No costs. Consequently, connected miscellaneous petitions are closed.
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