2021 (4) TMI 619 - Commissioner - GST

Revocation of cancellation of registration - non submission of reply to the SCN within the time specified therein - Rule 23 of the CGST Rules, 2017 - HELD THAT - The appellant did not discharge their total interest liability rather he stated that since he had not paid any tax liability through cash hence no any interest liability arised as per press note released on 22nd December 2018 - in terms of proviso of Section 50 of CGST Act, 2017 amended vide Notification No.63/2020- C.T dated 25.08.2020 interest liability on net tax has been considered on prospective date i.e. with effect from 1st Sept 2020. The appellant has not been complied with the first proviso of Rule 23 of CGST Rules, 2017 - the cancellation of registration of appellant may not be considered for revocation - Appeal dismissed - decided against appellant.

Summary

Issues:
Cancellation of GST registration due to non-filing of returns and rejection of application for revocation of cancellation of registration.

Analysis:
The appellant's GST registration was canceled due to non-filing of returns for six months, and the application for revocation was rejected for not submitting a reply to the show cause notice within the specified time. The appellant contended that no tax was paid in cash as Input Tax Credit exceeded output tax liability, citing a Ministry of Finance press release. The appellant also mentioned pending returns due to registration not being activated, potentially incurring penalties and late fees.

During a virtual personal hearing, the appellant's representative reiterated the grounds of appeal and confirmed the filing of all returns and payment of taxes, penalties, late fees, and interest. The Additional Commissioner reviewed the case based on written and oral submissions to decide on the appeal. It was found that the application for revocation was rejected as the appellant failed to respond to the show cause notice within the specified time.

The relevant provision under Rule 23 of the CGST Rules, 2017 states that for revocation of cancellation of registration, all due returns must be furnished, and any amount due as tax, interest, penalty, and late fees must be paid. The Central Board of Indirect Taxes & Customs clarified this requirement in a circular, emphasizing the need to furnish all returns before applying for revocation in cases of registration cancellation due to non-filing of returns.

The Additional Commissioner noted that the appellant did not fulfill the interest liability requirement as per the amended Section 50 of the CGST Act, 2017, effective from September 1, 2020. As the appellant did not comply with the rules, the cancellation of registration was not considered for revocation, leading to the rejection of the appeal.

In conclusion, the appeal was dismissed, and the cancellation of registration was upheld due to the appellant's failure to meet the necessary requirements for revocation as per the CGST Rules and relevant provisions of the CGST Act, 2017.