Cancellation of GST Registration for the reason of wrongful claim of ITC by petitioner is like putting the cart before the horse: High Court

Facts

The petitioner was holding GST Registration Certificate effective 01.07.2017. A show cause notice was issued by the assessing officer calling upon the petitioner to show cause why the registration not be cancelled, since the petitioner had not filed returns for a continuous period of six months. The non-filing of the returns is admitted. Thereafter, the registration came to be cancelled on 16.09.2019, which is also challenged by way of the present writ petition.

Two applications for restoration of registration have been filed by the petitioner under Section 30, the first one was rejected referring to non-compliance of the petitioner to notice issued by the assessing officer, and the second one was rejected referring to outstanding interest on belated payment of tax dues and for allegedly wrongful claim of ITC.

Held

The contention of the respondents herein that the revival of registration is conditional upon the petitioner satisfying tax dues and substantiating its claim of ITC, is misconceived. What is sought for by the petitioner is revocation/revival of registration only, and in the guise of considering the application for revocation, the authorities cannot embark upon the process of assessment.

An assessment would have to be made by the authority in terms of Section 73 or other applicable provision after following the procedure set out therein, and it is only in the course thereof that the officer may consider and decide questions of leviability of tax and claim of input tax credit.

Thus to state that registration will not be revived since the petitioner has incorrectly availed of ITC would be putting the cart before the horse. In fact, it is seen that the petitioner has filed monthly returns as well as annual returns for the periods January 2017-18 to September 2019-20 and for financial years 2017-18 and 2018-19 and has also remitted late fee for filing of belated returns. Thus, and these being the only conditions that are to be satisfied by the petitioner for grant of revocation of registration, I am of the view that the cancellation of the registration in this case is incorrect and improper.

Let the first respondent pass an order reviving the registration of the petitioner forthwith. Needless to say, the respondent is at liberty to take up matters of assessment thereafter, in accordance with law.

taxreply.com © 2024. All Rights Reserved