Whether lapses in compliance procedure is a fit ground for cancellation of GST registration?

 

Section 29 of the CGST Act, 2017 states that the proper officer may cancel the registration of a taxable person who has not furnished returns for such continuous tax periods as may be prescribed.

In the current scenario, the proper officer passed order cancelling the GST registration of the petitioner owing to non-filing of returns. While quashing the said order, the Madras High Court strenuously emphasized on the fact that the provisions of GST enactment cannot be interpreted so as to deny right to carry on Trade and Commerce to any citizen. Denial of GST registration would deprive them of their right to livelihood which is violative of the Constitution of India. Further, no useful will be served by not allowing such persons to revive the GST registration and integrate them back into the system. Therefore, they should be given a chance to regularize their defaults.

The Court also stressed on the uneducated background of the small-scale entrepreneurs who are not accustomed with handling of e-mails and other advance technologies. Hence, the court suggested the department to obviate this situation, by exploring the possibilities of issuing notices in the respective regional languages, by SMS and registered post.

— M/s Sri Ganesh Constructions v/s the Assistant Commissioner [W.P.(MD)No. 198 of 2024]