Filing Partial Returns Cannot Prevent GST Registration Cancellation

Case Title: Aisha Padmini v. Superintendent of Central Tax & Central Excise & Ors.
Court: High Court of Kerala at Ernakulam
Petition Number: WP(C) No. 9056 of 2025
Date of Judgement: 21 March 2025
Category of Dispute: Cancellation of Registration
Relevant Sections: Section 29(2)(c) of the CGST Act, 2017; Rule 21(h) & Rule 22(4) of the CGST Rules, 2017

Facts of the Case

• The petitioner, a registered taxpayer supplying security personnel, failed to file returns for six continuous months (Aug 2023 – Jan 2024). (Para 2)

• A show cause notice dated 12.03.2024 (Exhibit P1) was issued under Section 29(2)(c) read with Rule 21(h). (Para 2)

• Instead of replying, the petitioner filed returns belatedly for Aug 2023 (13.03.2024) and Sept 2023 (27.03.2024) after the notice. (Para 2 & 8)

• The Department cancelled her registration on 17.04.2024 (Exhibit P4). (Para 2)

• The petitioner argued that since two returns were filed, the continuity of default was broken, and cancellation was unjustified. (Para 2)

Question(s) in Consideration

• Whether filing returns for a few months after issuance of a show cause notice but before cancellation order can invalidate the continuous six-month default and prevent cancellation of registration? (Para 1)

Observations of the Court

• Section 29(2)(c) empowers cancellation where returns are not furnished for the prescribed continuous period; Rule 21(h) prescribes six months. (Para 4–5)

• Proviso to Rule 22(4) allows taxpayers to prevent cancellation only if all pending returns, tax, interest, and late fee are paid after issuance of SCN. (Para 6–7)

• Filing returns piecemeal for only two months does not erase the cause of action; the law mandates filing of all six months’ returns. (Para 7)

• The Court distinguished and overruled reliance on Phoenix Rubbers v. CTO (2020 KHC 533) as per incuriam since it did not consider the proviso to Rule 22(4). (Para 9)

Judgement of the Court

• The petitioner failed to file all six pending returns with tax, interest, and late fee despite the show cause notice. (Para 10)

• Hence, the order of cancellation dated 17.04.2024 was valid and justified. (Para 10)

• Writ petition dismissed. (Final Para)

Between Fine Lines (Simplified Summary)

1. A GST registration can be cancelled for six months of non-filing of returns.

2. Filing one or two returns later does not break the continuity of default.

3. To save registration, all pending returns with tax, interest, and late fee must be filed.

4. Courts cannot intervene if this requirement is not satisfied.

5. This judgment clarifies that partial compliance after notice is insufficient.

Summary of Referred Cases

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