2023 (9) TMI 396 - HC - GST

Rejection of petitioner s application for revocation of cancellation of his GST registration - Discrepancies noticed while conduct of Physical Verification - HELD THAT - The petitioner s application seeking revocation of cancellation of its GST registration was rejected as the Proper Officer found that the petitioner s explanation for delay of one day was not acceptable because the petitioner had not quoted any Section of the Limitation Act, 1963 in support of its claim. The HSN of goods and services was not reflected on the CBIC portal. The Proper Officer also highlighted that the principal reason for rejection of his was that the petitioner had shifted its place of business to a new place but the same was not reflected as additional place of business in the requisite form; thus, GSTIN could not be restored as it pertained to an earlier address. The petitioner had explained that the order cancelling its GST registration was passed on 22.07.2022, and it had filed its application for revocation of cancellation of its GST registration on 21.08.2022 and the day of filing the application was not required to be considered. The petitioner had filed its application for revocation on the 30th day following the date of its cancellation and, thus, it was within the period of limitation. Insofar as the discrepancies in the tax returns and tax liability is are concerned, that too cannot be a ground for cancellation of the petitioner s GST registration. The authorities have to proceed in accordance with law in assessing the correct liability, in the event there is any ground to believe that the taxpayer has not truly disclosed the same. Lastly, the petitioner had claimed that he had disclosed the bank details and the HSN of the goods because he had migrated from a VAT regime. However, the same was not accepted. The Appellate Authority had proceeded on the basis that the petitioner had not declared the classification of the goods dealt with by him - the petitioner was disabled from taking any corrective measures, even if it desired to do so. The impugned orders are set aside - Petition allowed.

Summary

Issues:
The judgment involves the cancellation and revocation of GST registration, discrepancies in tax returns, and the proper procedure to be followed in such cases.

Cancellation of GST Registration:
The petitioner challenged the cancellation of their GST registration, which was done based on a Show Cause Notice citing discrepancies noticed during physical verification. The petitioner's response to the notice was deemed unsatisfactory, leading to the cancellation of registration. However, the court found that the notice lacked specific reasons, and the cancellation order was not reasoned, hence unsustainable.

Revocation of GST Registration:
The petitioner applied for revocation of the cancellation, citing a delayed application due to the cancellation status preventing form submission for address change. The authorities rejected the revocation citing reasons like delay in application, discrepancies in tax returns, unreported address change, and missing details in registration. The Appellate Authority upheld the rejection, emphasizing the delay in filing the revocation application and discrepancies in tax returns.

Procedural Compliance and Restoration of Registration:
The court noted that the petitioner's explanation for the delay in revocation was valid as it was within the limitation period. The main ground for not restoring the registration was the unreported address change, which the petitioner claimed was due to the cancellation preventing form submission. The court held that this cannot be a valid ground for non-restoration. Additionally, discrepancies in tax returns should not lead to cancellation without proper assessment procedures. The petitioner's claims of disclosing bank details and goods classification were not accepted, but the court found that the authorities should have communicated the discrepancies during the active registration period for correction.

Judgment and Direction:
The court allowed the petition, setting aside the impugned orders and directed the restoration of the petitioner's GST registration. It clarified that the authorities could take lawful steps if necessary, with the petitioner retaining the right to contest. The petition was disposed of accordingly, along with any pending applications.