IMPORTANT POINT
Cancellation of GST registration should be exercised with circumspection, especially considering the impact of the Covid pandemic on business operations.

ORDER :

P.SAM KOSHY, J.

The challenge in the present Writ Petition is to the order dated 18.04.2023 passed by respondent No.3/The Deputy State Tax Officer cancelling the GST registration of the petitioner. The effective date of cancellation of registration is 28.02.2019.

2. Heard Dr. S.V. Rama Krishna, learned counsel for the petitioner, Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India appearing for respondent No.1 and Mr. Bhaskar Reddy, learned Standing Counsel for Commercial Taxes appearing for the respondent Nos.2 to 4.

3. It appears that the rejection has been made primarily on the ground that the petitioner has failed to file their returns for more than six (06) months continuously.

4. The petitioner herein is a company incorporated in the year 1976 and is a Public Sector Unit (PSU) jointly promoted by A.P. State Govt., All India Financial Institutions and Public Sector Banks such as IFCI, IDBI, ICICI, APSFC, SIDBI etc. and its accounts are audited by Comptroller and Auditor General (CAG). The petitioner is a technical consultancy service organization engaged in providing technical support services to the industry by undertaking technical, management and development consultancy services and also implements various welfare and training programmes on behalf of the Central and State Governments under different schemes across the country.

5. In addition, the petitioner is also registered with the GST Authorities and is given GST No.36AABCA7348D2ZU under the Goods and Services Tax Act, 2016 (for short, ‘the Act’) and regular in filing returns wherever applicable up till February, 2019. Thereafter, due to Covid pandemic, attrition of employees due to superannuation, retirement and resignations during this trouble period coupled with change of management in the year 2022, there were some missings in filing GST returns regularly on behalf of the petitioner. During the years 2018-2019 to 2021-2022, the petitioner made the following ad-hoc amounts towards CGST/SGST:

6. However, because of the impact of Covid pandemic and the consequences that arose thereafter, the petitioner could not file required returns from time to time leading to issuance of a show cause notice on 14.01.2023. Though the petitioner had replied to the same, however, without any further enquiry or an explanation or an opportunity of hearing, the impugned order has been straightaway passed.

7. Learned counsel for the petitioner submits that given a chance, the petitioner shall make good the default so far as non-filing of the returns are concerned and the petitioner is also ready to pay the requisite fine and penalty if any and the order of cancellation of registration accordingly be restored, or else the petitioner would be put to irreparable loss. Moreover, the cancellation of registration is not in the interest of either of the parties inasmuch as the Government is also not going to gain much.

8. Learned Standing Counsel for Commercial Taxes on the other hand contended that plain reading of the impugned order by itself is self-explanatory inasmuch as it would clearly reflect that the petitioner was issued with a show cause notice which was duly served upon and the petitioner had also replied to the same promptly. Though the petitioner had given the reply to the show cause notice, however, a default of non-furnishing of the returns for a period of six (06) months was not attended to in spite of the show cause notice being issued which has led to cancellation of the registration. As such, the petitioner is not entitled for relief that he seeks for through the present Writ Petition.

9. Having heard the contentions put f