The Madurai Bench of the Madras High Court has overturned a decision to cancel a business’s Goods and Services Tax (GST) registration. The cancellation had happened because the business had repeatedly failed to file its tax returns.
Justice Krishnan Ramasamy has ruled that financial difficulties and ill-health problems can be valid reasons for missing important deadlines, which justifies the need for legal support. Uma Sigamani, a business owner from Tirunelveli district who is registered for Goods and Services Tax (GST), filed a legal petition against a decision made on October 7, 2024, by a Commercial Tax Officer in Nanguneri. This decision cancelled her GST registration because she had not submitted her GST returns for six consecutive months.
The applicant invokes Article 226 of the Constitution of India, asking for the quashing of the cancellation order and restoration of her GST registration, claiming that the non-compliance was neither wilful nor intentional.
The petitioner stated that their failure to file GST returns was due to financial distress and health issues, which hindered their ability to comply with statutory requirements promptly. The applicant ensured the Court that they were ready and willing to file all pending returns and pay the entire tax liability, along with any applicable interest, penalties, and late fees.
The Additional Government Pleader representing the Commercial Tax Department confirmed the cancellation of the GST registration and left the case to the discretion of the Court, requesting pertinent orders.
The court post, analysing the records and hearing both sides, stated that the explanation of the applicant for the lapse seems to be genuine and reasonable. The court mentioned that the stringent legislation of procedural needs, without acknowledging genuine hardship, can lead to disproportionate outcomes, especially for small taxpayers.
The Court highlighted that GST registration is essential for conducting business, and cancellation should not be allowed to permanently hinder a taxpayer who shows a genuine intent to comply.
The court, permitting the writ petition, revoked the GST registration cancellation, as per the conditions, along with the payment of Rs 2000 to the District Siddha Medical Officer, CCRI PKM, Periyakulam. Submission of evidence of payment to the tax authorities, after which instructions were to be issued to GSTN to enable the filing of returns.
Filing the due GST returns, including the payment of tax dues, interest, and late fees, within 4 weeks from the restoration of registration. Restriction on using unused or unclaimed ITC for payment of past dues. ITC usage is only after effective scrutiny and approval by the competent authority. Automatic withdrawal of assistance will occur if any of the specified conditions are not met.
| Case Title | Uma Sigamani vs The Commercial Tax Officer |
| Case No. | W.P.(MD)No.36324 of 2025 |
| For Petitioner | Mr.R.Maheswaran |
| For Respondent | Mr.R.Suresh Kumar, AGP |
| Madras High Court | Read Order |
