Madras High Court Holds GST Registration Cancellation Revocable Subject to Compliance With Tax and Return Filing Conditions

Madras High Court Sets Out Conditions for Revocation of GST Registration Cancellation

The Madras High Court, presided over by Justice D. Bharatha Chakravarthy, has allowed a writ petition challenging the cancellation of GST registration, reiterating the legal principle established in the earlier decision of Tvl. Suguna Cutpiece Center v. The Appellate Deputy Commissioner (ST) (GST), Salem and Erode. The petitioner sought to quash the order dated 31.12.2024 cancelling her GST registration and requested its revival.

During the hearing, both parties agreed that the issue was squarely covered by the precedent set in the Suguna Cutpiece Center case. The Court, therefore, extracted and applied the operative portion of that judgment, which lays down a comprehensive framework for the revival of cancelled GST registrations.

According to the Court’s reasoning, taxpayers whose GST registrations have been cancelled are entitled to seek revocation of such cancellation, provided they fulfill certain statutory obligations. These include filing all pending returns for the period prior to cancellation, paying any outstanding taxes, interest for delayed payments, and fines or fees for belated filing, all within forty-five days from receipt of the order. The Court emphasized that such payments must be made in cash and cannot be adjusted against any unutilized or unclaimed Input Tax Credit (ITC).

The judgment further clarifies that any ITC that remains unutilized may only be used after scrutiny and approval by a competent officer of the Department. Only after such approval can the ITC be utilized for future tax liabilities. The Court also directed that GST and returns for the period subsequent to cancellation must be filed, with payment of GST in cash. The respondents are empowered to impose restrictions to prevent undue passing of ITC or bill trading during this process.

Upon compliance with these conditions—payment of tax, penalty, and uploading of returns—the GST registration is to be revived forthwith. The Court also directed the authorities to take necessary steps, including instructing the GST Network in New Delhi to make suitable changes to the GST web portal to facilitate the filing of returns and payment of dues by affected taxpayers.

In conclusion, the Madras High Court set aside the impugned order cancelling the petitioner’s GST registration and allowed the writ petition on the same terms as the Suguna Cutpiece Center judgment. The decision reinforces the principle that cancellation of GST registration is not absolute and may be revoked upon strict compliance with statutory requirements and safeguards against misuse of ITC.