Proprietorship Permitted to File GST Returns After Settling Outstanding Dues
In a significant ruling, the Gujarat High Court has directed the restoration of GST registration for M/s Durga Gopal Shinde, a sole proprietorship concern, following the cancellation of its registration due to non-filing of GST returns. The decision was delivered by a Division Bench comprising Justices A.S. Supehia and Pranav Trivedi, addressing the petition filed by the proprietor seeking reinstatement of its GST registration, which had been cancelled by the authorities with effect from April 1, 2022.
The petitioner, represented by advocate Mr. Vijay H Patel, contended that the cancellation was unwarranted as the firm had computed and discharged its tax liabilities by depositing the requisite amounts in the Electronic Cash Ledger. The court heard submissions from both the petitioner's counsel and the Assistant Government Pleader, Ms. Nimisha Parekh, representing the respondents, including the State of Gujarat.
The core issue revolved around the petitioner's failure to file GST returns for the period from April 2022 to December 2024, which led to the cancellation under Section 29(2)(b) of the Goods and Services Tax Act, 2017. The petitioner argued readiness to comply with the statutory requirements by filing the pending returns and had already paid Rs. 16,12,100/-, covering tax dues, interest, and late fees.
Ms. Parekh, for the respondents, acknowledged the deposit made by the petitioner and informed the court that upon filing of the returns, the authorities would process them and determine any further liabilities as per the GST Act.
In delivering the judgment, the High Court noted that the petitioner had deposited the outstanding amounts equivalent to what would have been paid had the returns been filed timely. The court deemed it just to allow the petitioner to file the GST returns and directed the revocation of the registration cancellation upon compliance. The court emphasized that should the returns be found non-compliant, the petitioner must promptly address any additional demands from the authorities.
This ruling underscores the importance of procedural compliance in GST matters while ensuring that taxpayers who rectify their defaults are not unduly penalized. The court's decision provides a pathway for businesses to re-enter the tax system and continue their operations, aligning with principles of justice and fairness.
Bottom Line:
GST Registration - Restoration of GST registration cancelled due to non-filing of GST returns - Petitioner allowed to file GST returns upon payment of outstanding tax, interest, and late fees - Cancellation of GST registration to be revoked upon compliance.
Statutory provision(s): Goods and Services Tax Act, 2017 Section 29(2)(b), Section 49 of the Gujarat SGST Act, 2017, Rule 87 of the Gujarat SGST Rules, 2017.
M/s Durga Gopal Shinde v. State of Gujarat, (Gujarat)(DB) : Law Finder Doc Id # 2824436
