GST registration cancellation quashed; restored subject to tax payment, interest, penalties, and return filing with ITC restrictions.

O R D E R

Heard the learned counsel for the Petitioner and the learned Senior Standing Counsel for the Respondent.

2. This Writ Petition is being disposed of at the stage of admission itself with the consent of the learned counsel for the Petitioner and the learned counsel for the Respondents.

3. The Petitioner is before this Court against the Impugned Order for Cancellation of Registration dated 26.03.2025, whereby the Petitioner’s registration cancelled in pursuant to the Show Cause Notice issued under Form GST REG-17/31 dated 12.02.2025, on the ground that the Petitioner failed to reply the same.

4. The learned counsel for the Petitioner submitted that this case is covered by the decision of this Court, in Tvl. Suguna Cut Piece Center, Represented by its Authorized Signatory v. The Appellate Deputy Commissioner (ST) (GST), Salem and another, (2022) 99 GSTR 386.

5. Both the learned counsel for the Petitioner and the learned Senior Standing Counsel for the Respondent confirmed that the issue is squarely covered by the decision of this Court in Tvl. Suguna Cut Piece Center, Represented by its Authorized Signatory Vs. The Appellate Deputy Commissioner (ST) (GST), Salem and another, (2022) 99 GSTR 386 wherein, in Paragraph Nos.227 to 229, this Court has observed as under:-

“227. This is a fit case for exercising the power under Article

226 of the Constitution of India in favour of the petitioners by quashing the impugned orders and to grant consequential relief to the petitioners. By doing so, the Court is effectuating the object under the GST enactment of levying and collecting just tax from every assessee who either supplies goods or service. Legitimate Trade and Commerce by every supplier should be allowed to be carried on subject to payment of tax and statutory compliance. Therefore, the impugned orders deserve to be quashed.

228. These petitioners deserve a chance and therefore should be allowed to revive their registration so that they can proceed to regularize the defaults. The authorities acting under the Act may impose penalty with the gravity of lapses committed by these petitioners by issuing notice. If required, the Central Government and the State Government may also suitably amend the Rules to levy penalty so that it acts as a deterrent on others from adopting casual approach.

229. In the light of the above discussion, these Writ Petitions are allowed subject to the following conditions:-

i.The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid.

ii.It is made clear that such payment of Tax, Interest, fine / fee and etc. shall not be allowed to be made or adjusted from and out of any Input Tax Credit which may be lying unutilized or unclaimed in the hands of these petitioners.

iii.If any Input Tax Credit has remained utilized, it shall not be utilised until it is scrutinized and approved by an appropriate or a competent officer of the Department.

iv.Only such approved Input Tax Credit shall be allowed for being utilized thereafter for discharging future tax liability under the Act and Rule.

v.The petitioners shall also pay GST and file the returns for the period subsequent to the cancellation of the registration by declaring the correct value of supplies and payment of GST shall also be in cash.

vi.If any Input Tax Credit was earned, it shall be a