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2023 (3) TMI 1326 - HC - GSTLevy of penalty for late filing of the GST returns - cancellation of its GSTIN registration - HELD THAT - It is clear from the above that the order dated 14.12.2020, rejecting the petitioner s application for revocation of cancellation of GSTIN registration is unsustainable. It provides no reason as to why the petitioner s application was rejected - the only reason is that the petitioner had not responded to the Show Cause Notice dated 27.10.2020. It is hard to accept that there could be any meaningful response to the said Show Cause Notice. It sets out no reason at all for proposing to reject the petitioner s application for revocation of cancellation. It is also noticed that the petitioner s principal contention was that it had already complied with the requirement of filing the returns on the date when the order cancelling its registration was passed and, therefore, the said order was unsustainable - from the date of the petitioner filing an application for revocation of its cancellation, that is, 16.10.2020, the petitioner cannot be held responsible for not filing its returns during the period when the registration stood cancelled. Thus, for the purpose of calculating any penalty for the late filing of the returns, the period, 16.10.2020 to 22.04.2022, is liable to be excluded. List on 14.04.2023.
Issues involved:
The issues involved in the judgment are the imposition of penalty for late filing of GST returns, cancellation of GSTIN registration, rejection of application for revocation of cancellation, and restoration of GSTIN registration. Imposition of Penalty for Late Filing of GST Returns: The petitioner had not filed GST returns for over six months, leading to a Show Cause Notice being issued. The petitioner argued that upon receiving the notice, they filed the returns and rectified the reason for the proposed cancellation of their GSTIN registration. Despite this, the respondent canceled the registration on 29.07.2020. Subsequently, the petitioner applied for revocation of the cancellation, which was rejected on 14.12.2020 due to non-response to a Show Cause Notice dated 27.10.2020. The appellate authority later allowed the appeal on 26.08.2021, directing the restoration of registration and granting 30 days to file pending returns. However, the registration was only restored on 22.04.2022, leading to the petitioner's inability to file returns before that date. The court held that the period from 16.10.2020 to 22.04.2022, when the registration was canceled, should be excluded for calculating any penalty for late filing of returns. Cancellation of GSTIN Registration and Rejection of Application for Revocation: The order rejecting the petitioner's application for revocation of GSTIN registration cancellation was deemed unsustainable as it lacked reasons for rejection besides non-response to a vague Show Cause Notice. The petitioner contended that they had already complied with return filing requirements when the registration was canceled, making the cancellation order invalid. The court opined that from the date of the application for revocation on 16.10.2020, the petitioner cannot be faulted for not filing returns during the cancellation period. The court directed the respondent's counsel to provide specific instructions on the matter for further proceedings. Restoration of GSTIN Registration: The petitioner filed a writ petition seeking restoration of GSTIN registration and compensation for business losses due to the cancellation. However, upon the restoration of registration and withdrawal of the damages claim, the petition was disposed of. The restoration of the GSTIN registration was delayed until 22.04.2022, preventing the petitioner from filing returns during that period. The court emphasized the exclusion of this period for penalty calculation purposes and scheduled further proceedings for clarification on the matter.
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