Allahabad HC: Re-active GSTIN as Non-filing of Return within Time Due to Health Issues

The Allahabad High Court has ordered the reinstatement of the GST registration of a business entity that was unable to file its returns on time due to extenuating circumstances. The Court acknowledged that the petitioner’s mother and sister had passed away after suffering from a prolonged illness, causing significant mental and financial strain on the petitioner. These challenges were deemed to be beyond their control.

The petitioner had been registered under the Goods and Service Tax Act of 2017 but was unable to submit their returns for a continuous period of six months. In response, a show cause notice was issued, suggesting the cancellation of the GST registration under Section 29 (2) (c) of the GST Act. However, the petitioner, due to the family bereavements, was unable to provide a timely response. Initially, the petitioner sought relief from the High Court against the cancellation, but the petition was dismissed in favour of pursuing an alternative remedy. Subsequently, an appeal was filed, which was also denied.

The petitioner’s legal counsel argued that the mental and financial exhaustion resulting from the deaths of the petitioner’s mother and sister had prevented them from filing the return on time. It was proposed that the petitioner be prepared to pay all outstanding dues, including interest, in instalments. However, the cancellation of their registration had rendered them unable to make online payments. Consequently, a request for the reinstatement of the GST registration was presented.

On the contrary, the State’s counsel contended that the petitioner had been collecting GST from its customers but failing to remit the same to the tax department. Furthermore, as the petitioner had continuously neglected to file returns for over six months, the actions taken against them were deemed justified.

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In light of the Kerala High Court’s decision in the case of Pazahyidom Food Ventures (P) Ltd. vs. Superintendent Commercial Tax, CGST, and the judgment of the Guwahati High Court in the matter of M/s. Veteran Facility Management Services Pvt. Ltd. vs. The Union of India & 5 others, a bench presided over by Justice Piyush Agrawal acknowledged that, under the unique circumstances of this case, the petitioner was prepared to deposit the tax amount.

As a result, the Court ordered the respondent to reinstate the petitioner’s GST registration and instructed the petitioner to deposit an initial sum of Rs. 6,00,000 after the restoration. The remaining amount shall be paid by the petitioner in six equal monthly instalments thereafter.