The Kerala High Court had dismissed the petition filed by petitioner (Sanscorp India Private Ltd) and upheld the cancellation of their GST registration due to their failure to file returns for a continuous period of six months.

A Single Judge Bench of Justice Dinesh Kumar Singh observed that “Admittedly, the petitioner did not file returns for a period of six months consecutively and therefore, the authority has no option than to cancel the registration. I do not find any error of law in the exercise of jurisdiction by the authority in cancelling the registration of the Petitioner”.

Advocate P. Raghunathan appeared for the Petitioner, whereas Advocate Reshmita Ramachandran appeared for the Respondent.

The brief facts of the case were that the petitioner had failed to submit GST returns in Form 3B for the period spanning from April 2022 to Dec 2022, as mandated by Section 39 of the Goods and Services Tax Act (GST Act). Subsequently, the petitioner received a show-cause notice, instructing them to provide reasons as to why their GST registration should not be cancelled due to their failure to file returns continuously for a six-month period. Additionally, the notice required the petitioner to appear before the relevant authority. Despite receiving the notice, the petitioner neither submitted a response nor filed the required return. Consequently, the petitioner's GST registration was cancelled.

The petitioner contended that if they have paid the GST amount and the associated interest, they should not be considered defaulters for failing to file the return. Consequently, the petitioner asserted that the proceedings for the cancellation of their registration should be rendered non-est and that the order cancelling their registration should be restored.

After considering the submission, the Bench highlighted that the provisions governing the cancellation of registration and the requirement to make payment of tax with interest are distinct and serve different purposes.

When an assessee fails to remit the full GST amount or a portion thereof, interest becomes applicable as a penalty for the delayed payment, and conversely, if an assessee neglects to file returns continuously for a period of six months, their registration becomes subject to cancellation, added the Bench.

The Bench further pointed that there is no contradiction in the provisions of Section 50 or Section 29 of the GST Act.

The Bench stated that it was undisputed fact that the petitioner had failed to submit returns for a continuous period of six months, and consequently, the authority had no alternative but to cancel the petitioner's registration.

The Bench further noted that while the petitioner argued that the GST software does not align with the provisions of the Act and its accompanying rules, this contention must be dismissed.

Lastly, the Bench pointed out that since the entire country utilizes the same software to file returns and pay taxes successfully, it cannot be claimed that the GST portal was not viable.

Accordingly, the High Court dismissed the petition.

Cause Title: M/s. Sanscorp India Private Ltd v. The Assistant Commissioner and Ors. [Neutral Citation: 2023: KER: 55811]

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Kerala High CourtJustice Dinesh Kumar Singh

Pankaj Bajpai