2022 (2) TMI 933 - MADRAS HIGH COURT

Condonation of delay in filing appeal - only ground on which the impugned order has been passed is that the appeal was filed beyond the time limit prescribed under Section 117 of the TNGST Act, 2017 - Cancellation of GST Registrations - returns not filed for a continuous period of 6 months - Section 29 of the TNGST Act, 2017 r/w Rule 22 of TNGST Rules - HELD THAT:- As original or as appellate authority exercising power under the respective enactments, quasi judicial officers were bound by the provisions of the Act and the limitation under it, they have acted in accordane with law. They cannot look beyond the limitations prescribed under provisions of the Act. Therefore, no fault can be attributed to their action - Under these circumstances, no fault can be attributed to the impugned orders passed by the Appellate Commissioner inasmuch as they cannot exercise jurisdiction beyond the provisions of the Act and are bound to Act in accordance of the provisions of the Act. At the same time, it is found that there are overwhelming reasons for granting reliefs to these petitioners to restore their registration.

Sub Section (2) to Section 29 deals with a situation where, a proper officer may cancel the registration of a person from such date, including a retroprospective date, as he may deem such. All the cases under consideration fall under situation under Sub Clause (2)(c) i.e “where a registered person other than the person specified in Clause (b) has failed to furnish returns for a continuous period of 6 months” - All these petitioners were issued with a proper notice as is contemplated under the aforesaid provision. The orders were also passed after giving petitioners sufficient opportunity of being heard. Majority of the petitioners failed to respond notices issued by the respondent State Tax Officer proposing the cancellation of the registration of the respective petitioners.

The time for filing appropriate application for revoking the cancellation of registration was extended either from date of service of the said cancellation order or 31.08.2020 which was later - all these petitioners whose registration had been cancelled prior to 12.06.2020 were given a fresh opportunity to file an application for revocation of cancellation of registration in terms of the Central Goods and Services Tax (Removal of Difficulties) Order, 2020 vide Order No.01/2020-Central Tax, Central Board of Indirect Taxes and Customs, dated 25.06.2020. However, none of the petitioners opted to exercise the privilege.

The provisions of the GST Enactments and the Rules made there under read with various clarifications issued by the Central Government pursuant to the decision of the GST Council and the Notification issued thereunder the respective enactments also make it clear, intention is to only facilitate and not to debar and de-recognised assesses from coming back into the GST fold. Thus, the intention of the Government has been to allow the persons like the petitioners to file a fresh application and to process the application for revocation of the cancellation of registration by the officers - no useful purpose will be served by keeping these petitioners out of the bounds of GST regime under the respective GST enactments other than to allow further leakage of the revenue and to isolate these petitioners from the main stream contrary to the objects of the respective GST enactments.

Since, no useful will be served by not allowing persons like the petitioners to revive their registration and integrate them back into the main stream, the impugned orders are liable to be quashed and with few safeguards - these petitioners deserve a chance and therefore should be allowed to revive their registration so that they can proceed to regularize the defaults. The authorities acting under the Act may impose penalty with the gravity of lapses committed by these petitioners by issuing notice. If required, the Central Government and the State Government may also suitably amend the Rules to levy penalty so that it acts as a deterrent on others from adopting casual approach.

The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid - petition allowed.