Cancellation of GST Registration affects taxpayer's right to carry on business and should be dealt without delay: High Court

This is a welcome and detailed judgement, wherein High Court directed the concerned officer for revival of registration instead of sending back the matter to Appellate Authority.

Petitioner:

Fact leading the petitioner to approach this Court in cancellation of his GST Registration by officer without assigning any reason invoking provisions of Section 29(2)(c) of the CGST Act inasmuch as there was non-filing of returns for consecutive period of six months.

Instead of seeking revocation of cancellation of registration under Section 30 of the CGST Act before the proper officer, the petitioner preferred appeal under Section 107 of the CGST Act on 05.08.2021 with a delay of around 660 days which came to be rejected on 07.10.2021.

It is submitted by the counsel for the petitioner that while the Appellate Authority made an observation in his Appellate Order that application for revocation of cancellation of registration as envisaged in Section 30 of the CGST Act read with Rule 23 of the CGST Rules, being not filed within prescribed period, instead of rejecting the appeal on the ground of limitation by taking pedantic view, should have appreciated genuine difficulty faced by not only the petitioner but also other similarly placed suppliers and recipients and relegated him for availing the benefit of said remedial recourse of revocation of order of cancellation of registration under said provision as there is no outer limit provided under afore-mentioned provisions and the delay for sufficient reason being shown can be condoned.

It is argued by the counsel for the petitioner that the Appellate Authority was not powerless to grant opportunity to the petitioner to deposit tax, interest coupled with penalty and late fee and relegate him to approach the Registering Authority under Section 30 of the CGST Act by condoning the delay as has been done by this Court in very many cases.

It is stated by the petitioner that in exercise of power under Section 128 of the CGST Act, the amount of late fee payable by registered person for failure to furnish return in Form GSTR-3B for the month of July, 2017 onwards by the due date under Section 47 has been waived by virtue of Notification No.76/2018- Central Tax, dated 31.12.2018 whereby ninth proviso has been inserted by way of amendment vide Notification No.19/2021- Central Tax, dated 01.06.2021

Relying on said proviso, it is therefore, asserted that had the registration been live, the petitioner would have the occasion to furnish returns between the period from 01.06.2021 to 31.08.2021 in Form GSTR-3B for the months/quarter of July, 2017 to April, 2021.

It is stated at the Bar that many cases of this nature has been rejected by the Appellate Authority by passing a common order, as a consequence of which taxpayers even though are ready to deposit tax, interest and penalty with late fee and also furnish return(s), they are deprived of availing such advantage as is bestowed in the aforementioned notifications. Since the Bar sought to address the issue, this Court asked Sri Rudra Prasad Kar, Advocate to render assistance in this regard.

Held by High Court:

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Cancellation of GST Registration

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