2025 (5) TMI 2067 - HC - GST

Seeking direction to the respondents to grant registration w.e.f. 01.07.2017 instead of 31.05.2018 - failure to apply u/s 24(2) in Form GST REG-26 registration - HELD THAT - Rule 24(3) provides that in case of non-furnishing of information as required under Rule 24(2) or incomplete or incorrect information having been furnished the provisional certificate granted shall be cancelled by the proper officer after providing reasonable opportunity of hearing to the person - In the case in hand the petitioner was issued provisional registration certificate and till date it has not been cancelled by invoking Rule 24(3) of the CGST Rules. The petitioner on a wrong advice received kept on sending reminders for issuance of regular registration and instead of filing an application under Rule 24(2) applied for fresh registration under rule 10 of CGST Rules. The eligibility of the petitioner for registration under the GST Act is not in dispute. The issue is only with regard to the intervening period of 01.07.2017 to 30.05.2018 which is due to filing an application in a wrong form by the petitioner - It cannot be lost sight of that under Rule 24(2) of the CGST Rules the Commissioner has power to extend the period beyond three months for filing an application under Rule 24(2) of the Rules. The matter is disposed of with liberty to the petitioner to file an application in Form GST REG-26 accompanied by an application seeking prayer for condoning the delay.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether the petitioner, who was registered under the erstwhile VAT regime and provisionally registered under GST from 01.07.2017, is entitled to have the final registration certificate deemed effective from the appointed day (01.07.2017) instead of the date of issuance of fresh registration certificate (31.05.2018).

- Whether the petitioner's failure to apply for final registration under Rule 24(2) of the CGST Rules, 2017, and instead filing a fresh registration application under Section 10(1) of the CGST Act, 2017, affects the entitlement to registration from the appointed day.

- Whether the petitioner withheld information regarding the provisional registration certificate while applying for fresh registration.

- Whether the issuance of two GSTINs on the basis of a single PAN number in one State is permissible under the GST law.

- The scope of the Commissioner's power to condone delay in filing the application under Rule 24(2) of the CGST Rules, 2017.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Registration Effective from 01.07.2017

The legal framework governing migration from VAT to GST is primarily encapsulated in Section 139 of the CGST Act, 2017, and Rule 24 of the CGST Rules, 2017. Section 139(1) mandates issuance of provisional registration certificates to persons registered under existing laws as of the appointed day (01.07.2017), subject to prescribed conditions. Section 139(2) requires issuance of final registration certificates in prescribed form and manner. Rule 24(1) and (2) provide the procedural mechanism for migration: provisional registration is granted upon enrolment and validation, followed by submission of an application in Form GST REG-26 within three months (or extended period) for final registration.

The Court noted that the petitioner was granted provisional registration from 01.07.2017 and that this provisional registration was never cancelled under Rule 24(3), which provides for cancellation upon non-furnishing or incorrect furnishing of information. The petitioner's eligibility for registration was undisputed.

The petitioner failed to apply under Rule 24(2) within the prescribed or extended period and instead filed a fresh application under Section 10(1) of the CGST Act, resulting in issuance of a new registration certificate effective from 31.05.2018.

The Court emphasized that the delay was due to wrong advice and that the petitioner had continuously reminded the department for issuance of regular registration. The Court recognized the procedural lapse but underscored that the petitioner's right to registration from 01.07.2017 remains intact subject to compliance with procedural requirements.

Issue 2: Effect of Filing Fresh Registration Application Instead of Migration Application

The petitioner's counsel admitted that the application for fresh registration was filed in error instead of the prescribed migration application under Rule 24(2). The respondent contended that this procedural irregularity justified refusal to grant registration effective from the appointed day and that the petitioner withheld information about the provisional registration.

The Court rejected the contention of withholding information, reasoning that the registration process is online and linked to the PAN. The common portal would have reflected the provisional registration regardless of the form used. Therefore, the petitioner's failure to disclose provisional registration was not deliberate or material.

The Court held that the procedural misstep of filing under Section 10(1) instead of Rule 24(2) does not extinguish the petitioner's right to final registration from the appointed day, especially since the provisional registration was valid and not cancelled.

Issue 3: Power to Extend Time for Filing Application under Rule 24(2)

Rule 24(2)(b) empowers the Commissioner to extend the three-month period for submission of the application for final registration. The Court noted this discretion and observed that the petitioner could seek condonation of delay while filing the application in the correct form.

The Court granted liberty to the petitioner to file an application in Form GST REG-26 along with a prayer for condoning the delay within two weeks. It directed that such application shall be processed expeditiously and that the Commissioner shall consider, inter alia, the petitioner's reliance on wrong advice and the pendency of the present petition.

Issue 4: Issuance of Two GSTINs on Single PAN in One State

The Court briefly noted the issue of whether two GSTINs can be issued on a single PAN in one State but did not conclusively decide this point. The Court indicated that this aspect requires further examination and did not form a basis for denying the petitioner's claim.

3. SIGNIFICANT HOLDINGS

"The contention of the learned counsel for the respondent that the petitioner had withheld the information of the provisional certificate lacks merit. The procedure of the registration under the GST Act is online and is linked with PAN. Department provided the provisional as well as the regular registration on common portal. Even in case of a default by the petitioner to disclose provisional registration while applying for a new registration certificate, the common PAN number filed would have depicted that the petitioner was already holding a provisional registration certificate."

"Under Rule 24(2) of the CGST Rules, the Commissioner has power to extend the period beyond three months for filing an application under Rule 24(2) of the Rules."

"In the facts and circumstances of the case, the matter is disposed of with liberty to the petitioner to file an application in Form GST REG-26 accompanied by an application seeking prayer for condoning the delay. In the eventuality of petitioner moving an application within two weeks from today, the same shall be processed in accordance with law, expeditiously."

Core principles established include the recognition that procedural lapses in filing the correct form for migration do not automatically forfeit the right to registration from the appointed day if provisional registration was valid and not cancelled. The Commissioner's discretion to condone delay is a vital safeguard to prevent undue hardship arising from technical errors or wrong advice. The online and PAN-linked registration system ensures transparency and prevents concealment of provisional registrations.

The final determination was that the petitioner is entitled to seek final registration effective from 01.07.2017 by filing the correct application with a request for condonation of delay, which the Commissioner is mandated to consider expeditiously and fairly. The issuance of a fresh registration certificate from 31.05.2018 does not preclude this right.