2022 (4) TMI 698 - HC - GST

Cancellation of registration of petitioner - non-furnishing of returns for continuous periods of six months - HELD THAT - The proper officer has been conferred with power to revoke cancellation of registration. It is also provided that application for revocation of cancellation of registration can be rejected after affording an opportunity to the Petitioner to have his say. It is apparent from the proviso extracted above that the application for revocation in Form GST REG-21 shall have to be made to the proper officer within a period of thirty days from the date of service of the order of cancellation of registration. Proviso to sub-rule( 1) of Rule 23 further requires returns to be furnished and amount due as tax in terms of such returns is to be paid along with amount payable towards interest, penalty and late fee in respect of the said returns. On compliance of such statutory requirement, application for revocation can be filed. The delay in invocation of provision of sub-rule (1) of Rule 23 of the CGST Rules is condoned. Upon compliance as agreed by the Petitioner, within two weeks of receipt of the copy of this order, the application for revocation shall be considered by the competent authority in accordance with law. Petition disposed off.

Summary

Issues:
Challenge to cancellation of GST registration due to non-furnishing of returns, application for revocation of cancellation, compliance with statutory requirements, interpretation of Section 30 of the CGST Act, delay in invoking Rule 23 of the CGST Rules.

Analysis:
The petitioner challenged the cancellation of their GST registration due to non-furnishing of returns, invoking Article 226 of the Constitution of India. The petitioner, a proprietorship concern, failed to submit returns due to prolonged illness, despite responding to show cause notices. The cancellation was based on continuous non-furnishing of returns for six months, as per the show cause notice and subsequent order. The petitioner expressed willingness to file returns and apply for revocation, emphasizing the difficulty faced. The opposite party argued that the revocation application was rightly rejected due to delay, requiring compliance with tax payments, interest, penalty, and late fees.

The court examined Section 30 of the CGST Act, which allows revocation of cancellation of registration under prescribed conditions. The petitioner cited precedents to support their compliance with statutory requirements if given a chance. The court highlighted the importance of timely application for revocation as per Rule 23, requiring payment of due taxes, interest, penalty, and late fees before filing for revocation. The proper officer holds the power to reject the application after providing an opportunity to be heard, emphasizing compliance with statutory obligations.

Both parties agreed that the petitioner would fulfill all statutory requirements by depositing taxes, interest, penalty, and late fees. The court condoned the delay in invoking Rule 23 and directed the competent authority to consider the revocation application upon compliance within two weeks. The department was instructed to facilitate return filing by reopening the portal once conditions were met. The writ petition was disposed of with these directions, emphasizing the importance of compliance with statutory provisions and timely revocation application.

In conclusion, the judgment addressed the challenges related to GST registration cancellation, application for revocation, compliance with statutory requirements, and interpretation of relevant provisions of the CGST Act and Rules. The court emphasized the need for timely compliance, payment of dues, and adherence to procedural requirements for revocation of registration, ensuring fair consideration of the petitioner's case.