2023 (9) TMI 1002 - HC - GST

Cancellation of GST registration of the petitioner - non-filing of the returns, despite notice - HELD THAT - The provisions for cancellation of registration and making payment of the tax due with interest are different. Both the provisions have different scope, purpose and intent. If an assessee fails to make payment of the full GST amount or part thereof, interest is liable to be levied for the delayed payment. Further, if an assessee fails to file the returns for a continuous period of six months, his registration is liable to be cancelled - there are no contradiction in the provisions of Section 50 or Section 29 of the GST Act, 2017. An alternative remedy is available to the petitioner as per the Act and the Rules thereto, which the petitioner should have resorted to within the statutory prescribed limit. Against the order of cancellation of registration, the petitioner ought to have availed the remedy of appeal within a maximum period of three months from the date on which the order is communicated. Admittedly, the petitioner did not file returns for a period of six months consecutively and therefore, the authority has no option than to cancel the registration - there are no error of law in the exercise of jurisdiction by the authority in cancelling the registration of the petitioner. It is made clear that if the petitioner applies for fresh registration, the said application shall be considered in accordance with law, expeditiously - petition dismissed.

Summary

Issues involved: Impugning Exhibit P3 order of cancellation of GST registration due to non-filing of returns, seeking reliefs through writ petition, interpretation of Sections 29 and 50 of the GST Act, 2017, restoration of registration after filing returns and paying tax with interest.

Issue 1: Cancellation of GST registration

The petitioner, a registered dealer under the GST Act, 2017, failed to upload returns in form 3B for a period of nine months, leading to a show cause notice and eventual cancellation of registration. The cancellation was based on the authority's power under Section 29 of the GST Act, 2017, which allows for cancellation if returns are not filed continuously for six months. The petitioner did not respond to the show cause notice nor filed a return, resulting in the cancellation of registration with effect from a specified date.

Issue 2: Relief sought through writ petition

The writ petition sought the quashing of the Exhibit P3 order cancelling registration, removal of conditions hindering return uploads, and keeping the GST site open for trading activities. However, the court found no error in the authority's decision to cancel registration due to non-compliance with filing returns for the statutory period. The court emphasized the availability of an appeal remedy within three months of the cancellation order, which the petitioner did not utilize.

Issue 3: Restoration of registration after filing returns and paying tax with interest

The petitioner argued that filing returns and paying tax with interest post-cancellation should lead to restoration of registration. However, the court clarified that the provisions for cancellation of registration and payment of tax with interest serve different purposes and do not contradict each other. The court upheld the cancellation of registration due to the petitioner's failure to comply with return filing requirements for six consecutive months.

Conclusion:

The court dismissed the writ petition, stating that the authority's decision to cancel registration was lawful. The petitioner was advised to apply for fresh registration if desired, with assurance of expedited consideration. The court rejected the petitioner's claim that the GST software was not compliant with the law, noting that the portal's functionality was consistent with national tax filing practices.