GST registration suspension revoked upon assessee undertaking to comply with returns and payment;

GST registration suspension revoked upon assessee undertaking to comply with returns and payment; Competent Authority to restore number within seven days of application.

Issue:

When an assessee’s GST registration is suspended, and the case is identical to previous matters where restoration was directed, what are the appropriate directions to ensure prompt restoration of the registration, compliance from the assessee, and resolution of the writ petition.

Facts:

• The assessee’s Goods and Services Tax (GST) registration was suspended.
• The court found that the present case was identical to previous matters already decided in WP(C) No. 1061/2024 and WP(C) No. 1130/2024 (implying a consistent legal approach to similar suspension issues).

Decision:

The court ruled in favor of the assessee and disposed of the writ petition with specific directions:

1. The assessee was directed to approach the Competent Authority for the registration of their GST number within seven days.
2. The Competent Authority was mandated to restore the GST number immediately upon completion of the requisite formalities by the assessee.
3. The assessee undertook to file all pending returns and deposit all due taxes, penalty, and interest within seven days of the restoration of their GST registration.
4. It was stipulated that if the assessee failed to comply with these undertakings within the stipulated period, the suspended registration would be deemed to be not restored.

Key Takeaways:

• Prompt Restoration of Suspended GST Registration: Courts recognize the critical importance of GST registration for business continuity and often direct expeditious restoration, especially when the grounds for suspension are found to be remediable or not of a severe nature.
• Balancing Assessee’s Rights with Revenue’s Interests: The court effectively balanced the assessee’s right to operate their business with the revenue’s interest in ensuring tax compliance.
• Conditional Restoration: The restoration is made conditional upon the assessee fulfilling specific compliance obligations (filing returns, depositing taxes, penalty, interest). This provides a strong incentive for the assessee to regularize their compliance.
• Role of Competent Authority: The Competent Authority is given a clear directive to act “immediately” upon completion of formalities, minimizing bureaucratic delays.
• Consequences of Non-Compliance: The clear consequence for the assessee’s failure to comply with the undertakings (suspended registration deemed not restored) provides a strong deterrent and ensures the court’s order is not merely advisory.
• Judicial Consistency: The reference to identical previous cases (WP(C) No. 1061/2024 and WP(C) No. 1130/2024) indicates a pattern of similar directions being issued in such matters, contributing to legal predictability.