Justice Krishnan Ramasamy found the petitioner’s explanation reasonable and sincere, especially in light of the reliance on expert advice. It, therefore, canceled the cancellation order and

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Auditor’s Advice on Rs. 20L Threshold Resulted in GST Registration Cancellation: Madras HC Orders Reopening of Portal for Return Filing
The bench canceled the GST registration cancellation order and directed the department to instruct the GST Network to effect necessary modifications to the portal so that the petitioner may file returns and pay dues

The Madras High Court has ordered the department to make changes in the architecture of the GST ( Goods and Services tax ) portal to enable the petitioner to file pending GST returns and regularize after the GST registration was cancelled due to reliance on the advice of an auditor on the threshold limit.

The petitioner, who ran a mobile phone shop under the name “Happy Mobiles,” had not filed GST returns for a six-month period based on the auditor’s advice that no GST was payable if the aggregate turnover was below ₹20 lakhs in a financial year. Acting on this non-compliance, the department cancelled the petitioner’s GST registration on 25.09.2018.

Also read: GST Notices to Innocents: Can Govt’s Mandatory Biometric Aadhaar Authentication Curb Identity Theft?

The petitioner asserted that the advice was given in good faith and not with any intent to evade tax. He submitted before the Court his willingness to file all pending returns and pay tax dues along with applicable interest and penalties.

The State’s counsel confirmed the facts and left it to the Court to decide on appropriate relief.

Justice Krishnan Ramasamy found the petitioner’s explanation reasonable and sincere, especially in light of the reliance on expert advice. It, therefore, canceled the cancellation order and ordered the department to instruct the GST Network to effect necessary modifications to the portal so that the petitioner may file returns and pay dues within four weeks from restoration.

Also read: Case Digest on GST Notices via Common Portal: Important Rulings by Different High Courts

However, the Court laid down certain conditions: it should be paid off without any unverified Input Tax Credit (ITC) and any unused ITC should be examined and sanctioned by the department before its future utilization.”