Madras High Court Restores GST Registration Cancelled for Non-Filing: Relief Granted for Ill-Health and Financial Hardship

Background of the Writ Petition

The matter in Uma Sigamani Vs Commercial Tax Officer (Madras High Court) arose from a challenge to an order dated 07.10.2024, by which the assessee’s GST registration was cancelled by the jurisdictional Commercial Tax Officer. The cancellation was founded on continuous non-filing of GST returns for a period of six months.

The assessee approached the Madras High Court by way of a writ petition, seeking to set aside the cancellation and to secure restoration of registration, emphasizing that the non-compliance was not wilful but driven by circumstances beyond control.

Key Facts Presented Before the Court

Reason for Non-Filing of Returns

The assessee’s counsel submitted that:

  • GST returns were not filed for a continuous six-month period.
  • The default was attributed to:
    • Severe financial constraints, and
    • Health-related issues (ill-health) affecting the assessee’s ability to comply with statutory obligations.

It was specifically argued that these reasons prevented timely filing of returns and payment of dues, resulting in cancellation of registration through the impugned order dated 07.10.2024.

Assessee’s Willingness to Comply

To seek equitable relief, the assessee made the following undertakings before the Court:

  • A categorical willingness to:
    • File all pending GST returns, and
    • Discharge the entire tax liability, including:
      • Tax dues,
      • Applicable interest, and
      • Any penalty or prescribed fee that may be leviable.
  • A request that the Court revoke the cancellation order and permit restoration of GST registration to regularize compliance prospectively and retrospectively.

Stand of the Tax Department

The learned Additional Government Pleader, appearing for the Commercial Tax Officer, confirmed the following:

  • The GST registration of the assessee had indeed been cancelled by the order dated 07.10.2024.
  • No serious objection was raised to the grant of relief, and the Department’s representative requested the Court to pass an appropriate order as it deemed fit, based on the facts and circumstances.

Court’s Consideration and Findings

Examination of Record

The Madras High Court:

  • Heard the submissions of both sides at the admission stage itself, with the consent of parties, and
  • Examined the records, including the impugned cancellation order.

The Court noted that:

  • The sole ground for cancellation was non-filing of GST returns for a continuous six-month period.
  • The assessee’s explanation pinpointed financial difficulty and ill-health as the reasons for such non-compliance.

Acceptance of Reasons as Genuine

Upon an overall assessment, the Court formed the considered view that:

  • The justification for non-filing of returns appeared genuine.
  • The assessee’s explanation for failure to comply with the relevant provisions of the Act within the stipulated time was not frivolous or mala fide.
  • Consequently, a case was made out for granting ...