GST Registration Can be Cancelled if you Don’t fill Returns for Six Months: Kerala HC

Do you know your GST registration can be cancelled if you are unable to file your returns for six months? Kerela High Court recently gave a verdict permitting the tax officials to cancel the GST registration of the taxpayers who are unable to fill up returns for six months. In the hearing, the petitioner defaulted returns the filing from May 20 onwards. The petitioner is a taxpayer that failed to file the returns since May 20 for which financial crises is being held responsible.

Countering the appeal of the petitioner, the fourth respondent issued Ext.P-1 proposing to cancel the GST registration of the petitioner on account of delay in filing the returns for 6 consecutive months. Hereon the 4th respondent challenged the petitioner by issuing the Ext.P-3 order that is meant to cancel the registration of a particular assessee (business firm) under Sec. 29(2) (c) of the CGST Act.

The primary dispute here was for the petitioner is to the effect that though the 4th respondent found that as on the date of Ext.P-1 notice dated 13.11.2019 there were six months continuous default on the part of the petitioner, that indeed there were only 5 months continuous default and not the mandatory six months continuous default in filing the returns as envisaged in Sec. 29(2)(c) of the CGST Act.

So here the challenging order Ext.P-3 is illegal and therefore is forbidden by the Court. Moreover, the said challenging order Ext P-3 demanding cancellation of petitioner’s GST registration was launched on 10.12.2019. Till 10.12.2019, the petitioner has already filed returns for May month that can easily be referred from the Ext.P-2 document.

The appeal was heard by judge Justice Alexander Thomas and concluding the case he delivered the order based on a writ petition filed by M/S.PHOENIX RUBBERS.

Any concerned officer might cancel the registration of the taxpayer from that date onwards or any retrospective date, as he may deem fit, where,–

  • He (taxpayer) has violated provisions of the Act or the rules made there under as may be prescribed; or
  • He is paying tax under Section 10 and has not submitted the returns for three back to back tax periods; or
  • Any registered individual (excluding the person determined by Clause (b)) found guilty of not furnishing returns for consecutive six months; or
  • An individual who has voluntarily taken up the registration under sub-section (3) of Section 25 and has not started any business (within six months) starting from the date of registration; or
  • Registration is acquired through unfair means by the assessee, any intentional misstatement or hiding of facts.

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