Order date – 24 March 2023

Parties – M/s. Bhagwati Trading Co. Vs Union of India & Ors.

Facts –

• The petitioner, M/s. BHAGWATI TRADING CO., had not filed its GST returns for more than six months, leading to the cancellation of its GSTIN registration by an order dated 29.07.2020.
• The petitioner filed an application for revocation of the cancellation of its GSTIN registration, which was rejected by an order dated 14.12.2020 for the sole reason that the petitioner had not responded to the Show Cause Notice dated 27.10.2020.
• The Writ Petition is filed to set aside the penalty of Rs.2,32,014/- imposed upon of the petitioner.

Issue –

• Since the petitioner had already complied with the requirement of filing the returns on the date when the order cancelling its registration was passed and, therefore, the said order was unsustainable.

Order –

• The Court has observed that order dated 14.12.2020, rejecting the petitioner’s application for revocation of cancellation of GSTIN registration is unsustainable. It provides no reason as to why the petitioner’s application was rejected.
• Further, it is hard to accept that there could be any meaningful response to the said Show Cause Notice. It sets out no reason at all for proposing to reject the petitioner’s application for revocation of cancellation.
• Hence, the order dated 14.12.2020, rejecting the petitioner’s application for revocation of cancellation of GSTIN registration, is unsustainable.
• The Court has directed that the petitioner’s penalty for late filing of GST returns be waived off since the reason for non-filing was the cancellation of its registration, which was subsequently revoked.