Andhra Pradesh HC Permits Assessee To Apply For Revocation of GST Registration Cancellation Missed Due to Insolvency Proceedings

Andhra Pradesh HC Permits Assessee to Apply for Revocation of GST Registration Cancellation Missed Due to Insolvency Proceedings

The Andhra Pradesh High Court has granted permission to an assessee to file an application for the revocation of their GST registration cancellation, which they missed due to ongoing insolvency proceedings. This relief came from the Division Bench comprising Justices R Raghunandan Rao and Harinath N, who emphasized that since the assessee was involved in insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) of 2016, some flexibility should be afforded to help them restore their business operations.

The assessee, engaged in real estate, had registered under the GST Act but had not filed returns or paid taxes since 2020. Consequently, the tax department issued a show cause notice, followed by the cancellation of the GST registration. During this period, the assessee was also undergoing insolvency proceedings under the IBC, which they claimed prevented them from seeking revocation of the registration cancellation in time.

Having emerged from the insolvency proceedings, the assessee expressed readiness to file all pending returns and settle any outstanding taxes. They noted that reviving their real estate business required an active GST registration certificate to enable them to receive paymentsfrom customers.

The court, acknowledging the impact of the Corporate Insolvency Resolution Process (CIRP) under the IBC, observed, “...the assessee/petitioner company had to undergo the CIRP process under the Insolvency and Bankruptcy Code, 2016, certain leeway would have to be granted to the assessee to bring its business back on the rails...”

Accordingly, the bench allowed the assessee until November 5, 2024, to submit anapplication for revoking the cancellation of their GST registration and directed them to clear any pending taxes by the same date.