The Madurai Bench of the Madras High Court has set aside the cancellation of GST registration of a Nagapattinam-based assessee, holding that genuine health and financial difficulties can justify non-filing of returns and deserve a liberal approach from tax authorities.
The bench of Justice Krishnan Ramasamy quashed the appellate order that had rejected the taxpayer’s appeal solely on the ground of limitation.
The writ petition was filed by Thamimul Ansari, whose GST registration was cancelled by the department on January 11, 2024, for failure to file GST returns for six consecutive months. The subsequent statutory appeal was also dismissed by the Joint Commissioner (Appeals) on October 31, 2025, citing delay.
The petitioner approached the High Court contending that his failure to file returns was not deliberate but caused by serious health problems and financial constraints. He argued that the cancellation of GST registration had crippled his business activities and that he was now willing to comply with all statutory requirements by filing pending returns and paying the entire tax dues along with applicable interest, penalty, and late fees.
The GST department, while confirming the fact of cancellation due to non-filing of returns, left the matter to the discretion of the Court.
After examining the facts, the High Court noted that the petitioner’s explanation for non-filing of returns appeared to be genuine. The Court emphasized that rigid adherence to limitation rules, without considering bona fide circumstances, could lead to disproportionate hardship, especially when the taxpayer is ready to regularize compliance.
The Court observed that GST registration is essential for carrying on business and its cancellation has severe civil consequences. Therefore, authorities must adopt a balanced and humane approach where the default is not intentional or fraudulent.
While granting relief, the Court imposed a detailed set of conditions to safeguard revenue interests. The appellate rejection order dated October 31, 2025, and the original cancellation order dated January 11, 2024, were quashed, and the GST registration of the petitioner was ordered to be restored.
The Court directed the department to coordinate with the GST Network (GSTN) to technically enable the petitioner to file pending returns within four weeks. The petitioner was ordered to file all pending returns and pay the entire tax dues, interest, and late fees within four weeks from restoration.
The Court clarified that the petitioner would not be allowed to discharge these liabilities using any unutilized Input Tax Credit (ITC). Any existing ITC would remain blocked and could be utilized only after scrutiny and explicit approval by the competent GST authority. The Court further warned that non-compliance with any of the stipulated conditions would automatically nullify the benefit granted.
Case Details
Case Title: Thamimul Ansari Versus The Superintendent
Case No.: W.P.(MD)No.2716 of 2026
Date: 02.02.2026
Counsel For Petitioner: R. Hemalatha
Counsel For Respondent: R.Gowri Shankar
