2020 (12) TMI 266 - HC - GST

Revocation of cancellation of registration - Registration certificate of the petitioner cancelled mainly on the ground that the petitioner has failed to file the return for a continuous period of six months - application for revocation of cancellation of registration filed on the ground that the petitioner had submitted all the pending returns under GSTR-3B and GSTR-1 and, thus, the entire tax liability stood clear with the late fees - Section 13 of U.P. GST Act 2017 - HELD THAT - A perusal of Section 29 (2)(c) of GST Act 2017, with which the present case is concerned clearly provides for cancellation of registration if the assessee fails to furnish the returns for a continuous period of six months and invoking the said clause the registration of the petitioner was cancelled as on 30.11.2019. Section 30 with the said Act provides a remedy to the person whose registration has been cancelled and in terms of the remedy so provided the petitioner approached the authority for revocation of the registration within the times specified therein - In terms of the proviso to Rule 23(1) a burden is cast upon the assessee to furnish returns and and to ensure that the tax due is paid along with any due interest penalty and late fees no further burden is cast upon the assessee or the persons seeking revocation. In the present case along with the application, the petitioner had filed a statement to the effect that all the requisite returns have been filed and the dues are cleared and thus it was incumbent upon the Department to have verified the correctness of averments made in the application - order dated 30.1.2020 passed by the Assistant Commissioner rejecting the application of the petitioner is wholly arbitrary and demonstrates the lack of legally trained mind as there appears to be no effort to verify the correctness of the assertions made by the petitioner at the end of the Department. Considering the fact that now the Department has accepted that the returns were filed within time and no dues remain payable, the order dated 30.11.2019 as well as the appellate order dated 06.07.2020 deserves to be set aside with a direction to allow the application for revocation of registration filed by the petitioner - Consequently, the order cancelling the registration stands revoked from the date of filing of the application before the respondent no. 2. Petition allowed.

Summary

Issues:
1. Alleged cancellation of registration certificate due to failure to file returns.
2. Rejection of application for revocation of cancellation of registration.
3. Dismissal of appeal by the Appellate Authority.
4. Legal provisions under U.P. GST Act 2017 regarding cancellation of registration.
5. Application of Rule 23 of U.P. GST Rules, 2017 for revocation of cancellation of registration.
6. Lack of verification by the Department and arbitrary decisions.
7. Contradictory stands taken by the Department.
8. Relief sought by the petitioner.

Analysis:

The petitioner, a proprietorship firm registered for construction services, faced cancellation of registration due to alleged failure to file returns for six months. An ex-parte order was passed on 30.11.2019 under Section 29(2)(5) of U.P. GST Act 2017. The petitioner applied for revocation of cancellation on 19.12.2019, citing submission of pending returns and tax liabilities cleared. However, a vague show cause notice was issued on 29.12.2019, leading to rejection of the application on 30.1.2020, citing lack of details on tax payments.

The petitioner appealed the rejection, providing evidence of filed returns and tax payments. Despite this, the Appellate Authority dismissed the appeal on 06.07.2020, citing lack of proper evidence and non-verification of facts. The Court observed the Department's failure to verify records and issued arbitrary decisions, causing harassment to the petitioner.

Legal provisions under Section 29 and Rule 23 of U.P. GST Act 2017 and Rules were analyzed. The Court highlighted the burden on the assessee to furnish returns and pay dues for revocation. The Department's failure to verify facts and issue vague notices was criticized, emphasizing the need for legally trained personnel in such matters.

Contradictory stands taken by the Department were noted, with instructions confirming no pending dues up to November 2019. The Court expressed surprise at the Department's attitude, leading to unnecessary harassment of the assessee. Given the Department's acceptance of filed returns and cleared dues, the cancellation of registration was revoked from the application date.

Consequently, the writ petition was allowed, with costs imposed on the respondent for harassment. The Court directed the respondent to pay &8377;10,000 to the petitioner within 30 days from personal salary, granting relief to the petitioner from unwarranted actions and arbitrary decisions.