2019 (7) TMI 1069 - HC - GST

Entitlement of having GST registration - deemed registration - power of the officers to seek additional details or clarifications - Rule 9(2) of the Central Goods and Services Tax Rules, 2017 - Furnishing of clarification, information and documents in relation to an application for registration made u/s 25 of the CGST Act, 2017 - benefit of deemed registration. It is contended by the senior counsel for the appellants that, a close scrutiny of the provision contained in Rule 9(2) would show that, neither under the first limb nor under the second limb of Rule 9(2), the proper officer had power to require the first respondent to produce the documents enumerated as item No.2 in Ext.P8 notice. Held that - The explanation provided to Rule 9(2) is not exhaustive. It only provides that clarification includes modification or correction of particulars required in the application for registration. It does not mean that no other clarification can be sought in respect of information furnished or documents produced along with the application for registration. The officer concerned is empowered under Rule 9(2) to issue notice to a person who has filed application for registration under Rule 8 to furnish clarification with regard to any information provided in that application or documents furnished therewith. Such clarification may include information to ascertain the legality of the business proposed to be conducted by the applicant but it does not include furnishing of any documents other than the documents required to be uploaded under Rule 8(4). The application, which may be submitted by the first respondent afresh, shall be considered by the appellants de hors the documents mentioned under item No.2 in Ext.P8 notice. However, on verification of such application, if it is found to be deficient in terms of any document required to be furnished under Rule 8(4), the proper officer is entitled to require the first respondent to furnish such document - Appeal disposed off.

Summary

Issues Involved:
1. Interpretation of Rule 9(2) of the Central Goods and Services Tax Rules, 2017.
2. Validity of the notice seeking additional information (Ext.P8).
3. Validity of the order rejecting the application for registration (Ext.P10).
4. Entitlement to deemed registration under Rule 9(5).
5. Requirement of documents for proving ownership and authorization to deal in lottery services.
6. Directions for reconsideration of the application for registration.

Issue-wise Detailed Analysis:

1. Interpretation of Rule 9(2) of the Central Goods and Services Tax Rules, 2017:
The court analyzed Rule 9(2) which empowers the proper officer to issue a notice to the applicant requiring clarification, information, or documents. The rule has two limbs:
- The first limb pertains to deficiencies in the application or documents required under Rule 8.
- The second limb pertains to seeking clarification on information provided in the application or documents furnished.
The court concluded that the proper officer cannot demand additional documents beyond those specified in Rule 8(4).

2. Validity of the notice seeking additional information (Ext.P8):
The court found that the documents requested under item No.2 of Ext.P8 notice, which pertained to authorization to deal in lottery services, were not required under Rule 8(4). Therefore, the proper officer had no power to demand these documents. The court held that the notice was partially invalid as it overstepped the requirements of Rule 8(4).

3. Validity of the order rejecting the application for registration (Ext.P10):
The court upheld the learned Single Judge's decision to decline interference with Ext.P10, which rejected the registration application. However, the court allowed the first respondent to file a fresh application, which should be considered without reference to the reasons stated in Ext.P10.

4. Entitlement to deemed registration under Rule 9(5):
The first respondent claimed entitlement to deemed registration due to the lack of action within three working days. The learned Single Judge negated this plea, stating that deemed registration applies only if no action is taken within the specified period. Since the first respondent did not appeal this finding, the court did not need to adjudicate this issue further.

5. Requirement of documents for proving ownership and authorization to deal in lottery services:
The court upheld the need for documents proving ownership of business premises as valid. However, it ruled that documents proving authorization to deal in lottery services (item No.2 in Ext.P8) were not required under Rule 8(4) and thus, could not be insisted upon by the proper officer.

6. Directions for reconsideration of the application for registration:
The court modified the learned Single Judge's direction, stating that any fresh application submitted by the first respondent should be considered without requiring the documents mentioned under item No.2 in Ext.P8. The proper officer can seek clarification on information provided but cannot demand additional documents beyond those specified in Rule 8(4).

Conclusion:
The court concluded that the proper officer's power under Rule 9(2) is limited to seeking clarification on information provided in the application or documents furnished therewith and does not extend to demanding additional documents not specified in Rule 8(4). The court modified the direction for reconsideration of the application, emphasizing that any fresh application should be assessed without insisting on the documents mentioned under item No.2 in Ext.P8.