2022 (10) TMI 951 - HC - GST

Cancellation of GST registration of the petitioner - maintainability of appeal under Section 107 is to be made within a period of three months from the date of the order impugned - HELD THAT - It is an admitted position of the petitioner assessee that they have failed to file the returns from the year 2018 up-to the year 2021 meaning thereby that the required amount of GST was also not paid for the aforesaid period. It is also noted that the provisions of Section 29 of the AGST Act 2017 which provides that if an assessee fails to furnish returns for three consecutive tax periods it may be a good reason for cancellation of the registration of the assessee concerned. From such point of view if the petitioner had not submitted the returns for three consecutive tax periods the act on the part of the departmental authorities in cancelling the registration cannot prima facie be faulted with. In the circumstance where the petitioner assessee is willing to file the returns and also pay all the tax dues including the interests and penalties etc. that may be leviable the petitioner may have invoked a wrong provisions of filing an appeal under Section 107 of the AGST Act 2017 - As the petitioner had acted diligently in seeking to avail the remedy under the law which although it may not have been the appropriate remedy under the circumstance it would be a good cause for the respondents to consider as to whether the delay in making such application can be suitable condoned. Petition disposed off.

Summary

Issues:

1. Appeal under Section 107 of the Assam Goods and Services Tax Act, 2017 rejected due to delay in filing.
2. Cancellation of GST registration due to failure to submit returns for consecutive tax periods.
3. Provisions for revocation of cancellation of registration under Section 30 of the AGST Act, 2017.
4. Consideration of revocation application beyond the prescribed period.
5. Public interest in ensuring tax payments and continuation of business activities.

Issue 1: Appeal Rejection under Section 107:
The petitioner, a GST assessee, failed to submit returns from 2018 to 2021, leading to the cancellation of GST registration by the Assistant Commissioner of State Tax. The petitioner's appeal under Section 107 was rejected by the Joint Commissioner due to a delay of more than 9 months in filing the appeal, contravening the three-month limit prescribed by Section 107(1). Although Section 107(4) allows for appeal if sufficient cause for delay is shown, the petitioner failed to demonstrate such cause, resulting in the rejection of the appeal.

Issue 2: Cancellation of GST Registration:
The cancellation of registration was based on the petitioner's failure to file returns for three consecutive tax periods, as per Section 29 of the AGST Act, 2017. The court acknowledged that non-submission of returns for three consecutive periods could warrant cancellation of registration, indicating that the department's action in canceling the registration was prima facie justified.

Issue 3: Revocation of Cancellation under Section 30:
Section 30 of the AGST Act, 2017 provides for the revocation of the cancellation of registration. The petitioner expressed willingness to file pending returns, pay outstanding GST dues, interest, and penalties. The court noted this willingness and suggested that the respondent authorities consider the petitioner's proposal for revocation, emphasizing the importance of tax compliance and public interest in revenue collection.

Issue 4: Consideration of Delayed Revocation Application:
While the revocation application was to be made within 30 days of cancellation, the petitioner missed this deadline. However, the court recognized the petitioner's proactive approach in seeking remedies under the law, albeit through the wrong provision. Considering the petitioner's diligence, the court suggested that the delay in the application could be condoned, urging the respondents to evaluate the situation and consider the revocation request.

Issue 5: Public Interest and Tax Compliance:
The court highlighted the public interest in ensuring tax payments and the continuity of business activities. Emphasizing the importance of tax revenue for the state, the court directed the petitioner to submit an application within fifteen days, with authorities expected to review the application within two months. The petitioner was also instructed to cooperate with the Department for a resolution, underscoring the need for tax compliance and dispute resolution in the interest of all stakeholders.

Conclusion:
The writ petition was disposed of with the directive for the petitioner to submit the application for revocation within the specified timeline, emphasizing cooperation and a thorough consideration of the revocation request by the authorities to bring the dispute to a resolution in the best interest of all parties involved.