2021 (12) TMI 230 - HC - GST

Seeking direction regarding restoration of old registration number under the GST Act - validity of demand as a result of denial of the Input Tax Credit (ITC) to the Petitioner - seeking direction to the Opposite Parties to permit the Petitioner to avail the ITC as an existing dealer under the existing law or on the goods held in stock on the appointed day - HELD THAT - The case of the Department is that the cancellation of the Petitioner s registration certificate issued originally under the Orissa Value Added Tax Act came about since the Petitioner failed to file returns. The case of the Petitioner, however, was that because of the cancellation of the registration certificate under the OVAT Act, he was not able to file returns and therefore was compelled to obtain a new registration - the fact remains that the Petitioner did seek the legal remedies against the cancellation of his old registration number. His revision petition came to be allowed on 17th September, 2018 by Opposite Party No.2. By that order, the old registration certificate was under OVAT Act restored and the further consequential restoration of the RC under the OST and CST Act, if any, also issued. With the Petitioner being constrained to apply for a new RC, in order to continue to transact business, it cannot be held against him that his application for the new RC should be construed as his having given up his claim for restoration of his old RC. On the contrary, he has an order in his favour by the revisional authority for restoration of his old RC. Even the filing of the present petition indicates the clear intention of the Petitioner that he wants the old RC to be restored. In the present case, the Court finds the stand taken by the Opposite Parties in insisting on the Petitioner continuing new registration to be unreasonable particularly since admittedly the Department has not yet implemented the order dated 17th September, 2018 of the revisional authority while at the same time not challenging it. In implementation of the order passed by Opposite Party No.2, the Opposite Parties will restore the Petitioner s old RC number and cancel the new RC number issued to him - Petition disposed off.

Summary

Issues:
1. Restoration of old registration number under the GST Act
2. Quashing of demand due to denial of Input Tax Credit (ITC)
3. Permission to avail ITC as an existing dealer or on goods held in stock

Analysis:
1. The petition sought direction for implementing the order restoring the old registration number under the GST Act, along with quashing a demand due to denied ITC. The petitioner also requested permission to avail ITC as an existing dealer or on goods in stock. Initially, the petitioner confined the prayer to restoration of the original registration as per the 2018 order by the Revisional Authority.

2. The court granted time for filing an affidavit to explain the issues related to the restoration of the original registration. The Department's counter affidavit stated that a new registration was granted to the petitioner, making restoration of the old registration technically difficult. The petitioner relied on a Delhi High Court judgment to argue that the relief granted should not be denied due to technical difficulties.

3. The Department contended that even if the old registration was restored, it would not assist the petitioner as the deadline for filing certain forms had passed. The petitioner's reply to a show cause notice regarding Input Tax Credit was presented, highlighting the claimed credit and the mismatch issue. The Department argued that the ITC claimed might not pertain to the GST period.

4. The court noted that the petitioner sought legal remedies against the cancellation of the old registration, which was later restored by the Revisional Authority's order. However, this restoration was not implemented by the Department, leading to the petitioner approaching the court. The Department's failure to provide a valid reason for the cancellation without notice was criticized.

5. The court found that the petitioner's application for a new registration should not be construed as giving up the claim for restoration of the old registration. Referring to a Delhi High Court judgment, the court emphasized the importance of protecting taxpayers' rights to avail credit. The court directed the restoration of the old registration and cancellation of the new one, instructing GSTN to facilitate ITC claims against the old registration. Other reliefs were left open for the petitioner to pursue as per the law.