The Madras High Court’s Madurai Bench has directed the Goods and Services Tax Network (GSTN) to consider technical measures to enable a taxpayer to file pending returns, following a default caused by the accountant’s failure to file GST returns for six months.
In the case of Tvl. KRM Construction contested the cancellation of its GST registration, which was ordered on 1 July 2024 due to continuous non-filing of returns.
The applicant claimed that because of various health issues, a part-time accountant was given responsibility for statutory compliance, along with filing GST returns. The accountant failed to meet his obligations, which led to the non-filing of the returns and eventually the cancellation of registration.
Justice Krishnan Ramasamy cited that the explanation given by the applicant appeared to be genuine and bona fide.
The court considered the fact that the taxpayer had mentioned its intention to submit all the due returns and release the whole tax obligation, including applicable interest, late fee, and penalty, if allowed to do so.
As per that, it ruled that the outcome of cancellation of GST registration was not needed in the facts of the case.
The High Court revoked the cancellation of GST registration, subject to robust compliance norms. The court asked the tax authorities to guide GSTN, New Delhi, to make appropriate revisions in the GST portal architecture to allow the applicant to submit the due returns and make payment of dues within the said duration of 4 weeks.
The Court asked the applicant to submit due returns and clear tax dues along with interest and late fee within 4 weeks from the restoration of registration. It explained that no tax, interest, or penalty could be paid or adjusted using unutilised or unclaimed Input Tax Credit (ITC). Any ITC lying in the electronic credit ledger was directed to remain blocked until it is scrutinised and expressly approved by the competent authority.
The HC issued a caution that failure to follow any of the prerequisites shall automatically terminate the relief granted and reinstate the penalties of cancellation. Through such norms, the writ petition was dismissed.
| Case Title | Tvl.KRM Construction vs The Assistant Commissioner |
| Case No. | W.P.(MD)No.35506 of 2025 |
| For Petitioner | Mr.S.Karunakar |
| For Respondent | Mr.R.Suresh Kumar, AGP |
| Madras High Court | Read Order |
