2023 (4) TMI 342 - HC - GST

Cancellation of registration of petitioner - appeal has been rejected as time barred under section 107(1) and (4) of the CGST Act - HELD THAT - Apparently, notification appears to be beneficial in nature as it provides a window of opportunity to all such registered persons whose registration were cancelled for non-compliance of the provisions of Section 29(2) (b) and (c) of CGST Act, 2017. Such registered persons may apply for revocation of cancellation of registration up to 30th June 2023, subject to filing of returns due upto the effective date of cancellation of registration and payment of any amount due as tax along with interest, penalty and late fee in respect of such returns. It is also made clear that no further extension of time period for filing application for revocation of cancellation of registration shall be available in such cases. The Explanation to the notification also indicates that the notification shall cover not only those persons who failed to apply for revocation of cancellation of registration within the time specified in Section 30 of the Act, but also those whose appeal against the order of cancellation of registration under Section 107 of the Act stood rejected or they failed to adhere to the time limit specified under sub-section (1) of Section 30 of the said Act to approach the Appellate Authority against the order rejecting application for revocation of cancellation of registration under section 107 of the Act. The petitioner falls in the category of cases where the appeal preferred against the cancellation of GST registration has been rejected under Section 107(1) and (4) of CGST Act as time barred. However, since the provision is beneficial in nature and appears to ameliorate the difficulty faced by such registered persons whose GST registration stood cancelled, the writ petition is disposed of with a direction to the petitioner to approach the proper officer with an application for revocation of cancellation of registration by 30th June 2023, as per the Notification dated 31.03.2023 after complying with the conditions prescribed thereunder. The impugned order of cancellation of registration and affirmed by order in appeal, shall not come into the way of the proper officer to consider the prayer for revocation of cancellation of registration in terms of the Notification No. 03/2023 - Petition disposed off.

Summary

Issues:
The issues involved in the judgment are the cancellation of GST registration, rejection of appeal, and the applicability of Notification No. 03/2023-Central Tax for revocation of cancellation of registration.

Cancellation of GST Registration:
The petitioner sought quashing of the Order-in-Original dated 24.02.2022, which canceled the GST registration, on the grounds of failure to file returns and appear for a physical hearing. The petitioner had submitted returns in GSTR-3B for the relevant period and paid the GST amount. The Order-in-Appeal also affirmed the cancellation of registration. The petitioner's business faced difficulties due to the cancellation of registration, leading to payment withholding by employers. The petitioner requested immediate restoration of GST registration.

Rejection of Appeal:
The appeal filed by the petitioner against the Order-in-Original was rejected by the Appellate Authority mainly due to not filing the appeal for revocation of canceled GST registration within the prescribed time limits under the Central Goods and Service Tax Act, 2017. The appeal was rejected under Section 107(1) & 107(4) of the Act, along with rule 109 A(1) of the Central Goods and Service Tax Rules, 2017.

Applicability of Notification No. 03/2023-Central Tax:
The Notification provided a window of opportunity for registered persons whose registration was canceled under specific clauses of Section 29 of the CGST Act on or before 31st December 2022. The petitioner fell under the category covered by the Notification and was eligible to apply for revocation of cancellation of registration until 30th June 2023. The Notification required filing of due returns, payment of taxes, interest, penalty, and late fees. The petitioner was willing to avail of this opportunity to revive the business affected by the cancellation of registration.

Judgment Summary:
The High Court considered the Notification No. 03/2023-Central Tax and its beneficial nature in providing relief to registered persons facing cancellation of GST registration. Despite the rejection of the appeal, the petitioner was directed to approach the proper officer for revocation of cancellation of registration by 30th June 2023, following the conditions outlined in the Notification. The impugned orders of cancellation of registration were not to hinder the consideration of the revocation application. The writ petition was disposed of in light of the Notification, aiming to alleviate the difficulties faced by registered persons affected by the cancellation of GST registration.