IN THE HIGH COURT FOR THE STATE OF TELANGANA: HYDERABAD

***
WRIT PETITION No.4401 of 2024

Between:
APITCO Ltd.
Petitioner
VERSUS

The Union of India and Ors.

Respondents

ORDER PRONOUNCED ON: 28.02.2024

THE HON’BLE SRI JUSTICE P.SAM KOSHY

AND
THE HON’BLE SRI JUSTICE N.TUKARAMJI

1. Whether Reporters of Local newspapers

may be allowed to see the Judgments? : Yes

2. Whether the copies of judgment may be

marked to Law Reporters/Journals? : Yes

3. Whether His Lordship wishes to

see the fair copy of the Judgment? : Yes

__________________
P.SAM KOSHY, J

__________________
N.TUKARAMJI, J
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* THE HON’BLE SRI JUSTICE P.SAM KOSHY

AND
THE HON’BLE SRI JUSTICE N. TUKARAMJI

+ WRIT PETITION No.4401 of 2024

% 28.02.2024

# Between:
APITCO Ltd..
Petitioner
VERSUS

The Union of India and Ors.

Respondents

! Counsel for Petitioner(s) : Dr. S.V. Rama Krishna

^Counsel for the respondent(s) : 1) Mr. Gadi Praveen Kumar for

respondent No.1

2) Mr. Bhaskar Reddy for respondent

Nos. 2 to 4

<GIST:

> HEAD NOTE:

? Cases referred

1) W.P.(C) 9424/2023 and CM Nos.36000/2023 &36001/2023

2) 2022 SCC OnLine Mad 8452

 3

THE HONOURABLE SRI JUSTICE P.SAM KOSHY

AND
THE HONOURABLE SRI JUSTICE N.TUKARAMJI

WRIT PETITION No.4401 of 2024

ORDER: (per Hon’ble Sri Justice P.SAM KOSHY)

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

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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:

For the financial year 2018-19 -- Rs.16,90,367/-

For the financial year 2019-20 -- Rs.7,24,819/-
For the financial year 2020-21 -- nil
For the financial year 2021-22 -- Rs.20,00,000/-
Total amount paid -- Rs. 44,15,186/-

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

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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.

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9. Having heard the contentions put forth on either side and also

going through the factual details that are reflected from the pleadings

itself, what is apparently visible is that the show cause notice was

issued to the petitioner on 14.01.2023. The charge against the

petitioner was that of not furnishing the GST returns for more than

six (06) months continuously.

10. At this juncture, it is necessary to appreciate the fact that the

show cause notice was that of December, 2020. Everybody knows that

since March, 2020, onwards it was Covid pandemic that ripped

through the entire country bringing the entire commercial and

industrial establishments to a standstill or at least remaining closed

for a major part of that period. The business of these establishments

including that of the petitioner must have definitely been affected.

11. It is relevant at this juncture to take note of the recent decision

of the High Court of Delhi in the case of Kritika Agarwal v. Union of

India and others 1, wherein the High Court in a case of cancellation of

GST registration had observed that:

“the measure of cancellation of GST must be exercised

with circumspection and only in cases, where it is
necessary”. This in otherwise means that the intention of
the Hon’ble Delhi High Court by allowing the writ petition
was that the authorities concern should take a more
pragmatic approach so far as the case where GST
registration is concerned and cancellation should not be

1
W.P.(C) 9424/2023 and CM Nos.36000/2023 &36001/2023
 7

restored in a mechanical manner or as a matter of

routine. Similar decision has also been passed by
Division Bench of this Court in W.P.No.36174 of 2022
vide order dated 20.09.2021, where the Division Bench
had set-aside the order of the appellate authority and the
matter had been remanded back for fresh consideration
on its own merits.”

12. Likewise, there is yet another decision from the High Court of

Madras in the case of Tvl. Sastha Engineering Works, Rep by its

Partner v. State Tax Officer (Circle) and Another 2 wherein the High

Court of Madras in paragraph Nos.4 to 7 has held as under:

“4. It is submitted by the learned counsel for the Petitioner

that in identical circumstances, this Court, in the case of
Tvl.Suguna Cutpiece Vs The Appellate Deputy Commissioner
(ST) (GST) and others (W.P.Nos. 25048, 25877, 12738 of
2021 etc., batch), dated 31.01.2022, issued the following
directions:

“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

2
2022 SCC OnLine Mad 8452
 8

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

allowed to be utilised only after scrutinising and
approving by the respondents or any other competent
authority.

vii. The respondents may also impose such restrictions

/ limitation on petitioners as may be warranted to
ensure that there is no undue passing of Input Tax
Credit pending such exercise and to ensure that there
is no violation or an attempt to do bill trading by
taking advantage of this order. viii. On payment of tax,
penalty and uploading of returns, the registration shall
stand revived forthwith.

viii. On payment of tax, penalty and uploading of

returns, the registration shall stand revived forthwith.

ix. The respondents shall take suitable steps by

instructing GST Network, New Delhi to make suitable
changes in the architecture of the GST Web portal to
allow these petitioners to file their returns and to pay
the tax/penalty/fine.

x. The above exercise shall be carried out by the

respondents within a period of thirty (30) days from
the date of receipt of a copy of this order.

xi. No cost.

xii. Consequently, connected Miscellaneous Petitions

are closed.”

5. The same has been consistently thereafter followed by this

Court in various decisions, viz.,

a) M/s.Maaruthi Foundations Private Limited Vs Deputy

Commissioner (ST) (FAC), reported in 2022 (5) TMI 405;

b) J. Jayakrishnan Vs The Additional Chief

Secretary/Commissioner of Commercial Taxes, Chennai
reported in 2022 (7) TMI 1226;
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c) TVL.Jeyalakshmi Store represented by its Proprietor,

Sivanu Pandian Vs Commissioner of Commercial Taxes
reported in 2022 (7) TMI 1275 ;

d) M/s.Pearl and Company Vs The Commissioner of

Commercial Taxes in W.P(MD)No.19127 of 2022.

6. In view of the fact that this Court has been consistently

following the directions issued in the case of Tvl.Suguna
Cutpiece Vs Appellate Deputy Commissioner (ST) (GST) and
others (W.P.Nos.25048, 25877, 12738 of 2021 etc., batch)
and the Revenue/Department has also accepted the said view
as evident from the fact that no appeal has been filed in any
of the matters, this Court intends to follow the above order of
this Court.

7. In view of the same, this Court feels that the benefit

extended by this Court in the earlier orders referred to above
in Suguna Cutpiece Centre's case cited supra, may be
extended to the Petitioner.

13. Given the said factual matrix of the case as also the judicial

pronouncements that are referred to in the preceding paragraphs, if

the default on the part of the petitioner is only so far as non-

furnishing of the returns, we are of the considered opinion that

subject to the petitioner making good the default, the said GST

registration of the petitioner would get restored which would enable

the petitioner to carry on his business and which would also generate

GST revenue to the respondent authorities as well.

14. Learned counsel for the petitioner has also undertaken to make

good the necessary default so far as non-furnishing of the GST

returns are concerned along with late fees and penalty that would be

applicable.
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15. In view of the same, the present Writ Petition stands allowed

directing the petitioner to immediately appear before the respondent

authorities by 12.03.2024 and upon furnishing the entire GST

returns up till date which they have not yet filed along with requisite

late fees and penalty if any, the respondent authorities shall forthwith

restore the GST registration of the petitioner without any further

scrutiny so far as the default of non-payment of GST returns till now

is concerned and the same is a onetime measure. It is made clear that

upon the petitioner making good the default so far as filing of the

returns up till date along with late fees and penalty, the order of

cancellation of GST registration of the petitioner dated 18.04.2023

would automatically get restored.

16. The Writ Petition accordingly stands allowed. However, there

shall be no order as to costs. Consequently, miscellaneous petitions

pending if any, shall stand closed.

__________________
P.SAM KOSHY, J

__________________
N.TUKARAMJI, J

Date: 28.02.2024

Note: LR copy to be marked: Yes

B/O
GSD