2020 (10) TMI 1174 - HC - GST

Effective date of registration certificate - conversion of the provisional registration to a permanent registration - HELD THAT - The procedure that had to be followed by the petitioner for obtaining a registration under the GST, in circumstances where he was already a registered dealer under the erstwhile KVAT Act, is the one prescribed in Rule 24 of the GST Rules. It is not in dispute that the petitioner applied for a registration in accordance with Rule 24 and was in fact granted a provisional registration as evident from Ext.P1 certificate dated 28.06.2017. It is also significant to note that thereafter, the provisional registration granted to the petitioner was not formally cancelled by the respondents by following the procedure envisaged under the Act for cancellation of the provisional registration. Under such circumstances, the petitioner continued to function under the provisional registration granted to him, although the absence of a permanent registration resulted in a situation where he could not upload the returns and other documents enabling him to claim input tax credit in respect of the tax paid stock of material that was available with him. When the provisional registration granted to the petitioner was not cancelled through the procedure contemplated under the Act and Rules, and the respondents had granted a regular registration on 04.01.2020, the permanent registration must relate back to the date of the provisional registration and the petitioner ought to be entitled to upload the returns for the past period between the date of Exts.P1 and P3 and to avail eligible input tax credit based on the returns uploaded by him. This is more so because it is admittedly the case that there was no formal order canceling the provisional registration, that was communicated to the petitioner in terms of the Act and Rules. The respondents are directed to amend the Registration Certificate issued to the petitioner so as to make it valid from 01.07.2017, and the petitioner is permitted to upload the returns for the period covered by Exts. P5, P6 and P7 statements, and to pay tax as well as claim input tax credit based on the returns so uploaded - petition allowed.

Summary

Issues:
1. Conversion of provisional registration to permanent registration under GST Act.
2. Denial of input tax credit and inability to upload returns due to registration discrepancies.
3. Validity period of registration certificate and entitlement to input tax credit.

Issue 1: Conversion of provisional registration to permanent registration under GST Act
The petitioner, a dealer in automobiles, was granted provisional registration under the GST Act after applying for registration upon the introduction of the Act. Despite attempts to convert the provisional registration to permanent and claim input tax credit, the petitioner faced login issues and was unable to upload the required form. The respondents did not cancel the provisional registration nor did they grant permanent registration promptly, leading to the petitioner's request for a change in the effective date of the registration certificate. The rejection of this request prompted the petitioner to file a Writ petition before the High Court challenging the decision.

Issue 2: Denial of input tax credit and inability to upload returns due to registration discrepancies
The 5th respondent contended that the petitioner did not follow the prescribed procedure for converting the provisional certificate to permanent registration, resulting in the system not accepting returns or applications from the petitioner. However, the petitioner produced a communication indicating the attempts made to upload the required form for input tax credit and conversion to permanent registration. The Court noted that the petitioner continued to operate under provisional registration, unable to claim input tax credit or upload returns due to the absence of permanent registration.

Issue 3: Validity period of registration certificate and entitlement to input tax credit
The Court held that the petitioner, having been granted provisional registration which was not formally cancelled, should be entitled to upload returns for the period between provisional and permanent registration. The registration certificate's validity from 04.01.2020 was deemed a discrepancy, and the Court directed the respondents to amend the certificate to reflect validity from 01.07.2017. The petitioner was instructed to upload returns for the relevant period and claim input tax credit, with the respondents required to provide portal access within a month from the judgment date.

In conclusion, the Court allowed the Writ petition, quashed the rejection communication, and directed the necessary amendments to the registration certificate to enable the petitioner to claim input tax credit and upload returns for the relevant period.