Tvl.Tharaga and Co Vs Superintendent (Madras High Court)
Conclusion: Cancellation of GST registration due to assessee’s failure to file returns on time would be revoked in case of genuine medical reasons and assessee’s willingness to pay tax and interest without adjusting from unutilized Input Tax Credit (ITC).
Held: Assessee represented by its partner, Mr. Sukumar Chandran, explained that he was suffering from Type II Diabetes Mellitus and, due to health issues, could not attend to statutory obligations, including the filing of monthly GST returns. This delay led the respondent authorities to cancel the registration. Assessee submitted that the firm was ready to file all pending returns and pay the full tax dues along with applicable interest and penalties. The request was for the Court to revoke the cancellation and restore the registration. Revenue confirmed the cancellation but did not oppose the plea, noting assessee’s willingness to settle the outstanding liabilities. It was held that the reason provided for non-filing of returns, in the considered opinion of the Court, appeared to be genuine. It decided to revoke the cancellation, but imposed specific conditions. These included filing all pending returns for the relevant period within four weeks from restoration, paying the entire tax and interest along with late fees, and strictly prohibiting the use of any unutilized Input Tax Credit (ITC) for settling these past dues. The court clarified that any ITC in assessee’s account could only be used for future liabilities after scrutiny and approval by the competent authority.
