REVOCATION OF CANCELLED GST REGISTRATION CERTIFICATE

[Mr. M. GOVINDARAJAN]

Cancellation of registration

Section 29(1) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides that the proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,–

•  the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
• there is any change in the constitution of the business; or
• the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25.

During pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.

Revocation of cancellation of registration

Section 30 of the Act provides that subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the Form GST REG - 21 within 30 days from the date of service of the cancellation order.   Such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,-

• by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding 30 days;
• by the Commissioner, for a further period not exceeding 30 days, beyond the period specified for Additional Commissioner.

The proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application.  The application for revocation of cancellation of registration shall not be rejected unless the applicant has been given an opportunity of being heard.

Rule 23(1) provides the conditions for revocation of registration as below-

• No application for revocation shall be filed, if the registration has been cancelled for the failure of the registered person to furnish returns, unless such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.
• All returns due for the period from the date of the order of cancellation of registration till the date of the order of revocation of cancellation of registration shall be furnished by the said person within a period of 30 days from the date of order of revocation of cancellation of registration.
•  Where the registration has been cancelled with retrospective effect, the registered person shall furnish all returns relating to period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration within a period of thirty days from the date of order of revocation of cancellation of registration.

Where the proper officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation of registration by an order in Form GST REG-22 within a period of 30 days from the date of the receipt of the application and communicate the same to the applicant.   The proper officer may, for reasons to be recorded in writing by an order in Form GST REG-05, reject the application for revocation of cancellation of registration and communicate the same to the applicant.

The proper officer shall, before passing the order issue a notice in Form GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation should not be rejected and the applicant shall furnish the reply within a period of 7 working days from the date of the service of the notice in Form GST REG-24.

Order for revocation of cancelled certificate to be complied with

The registered persons may get the revocation order either by the lower authority or by the Appellate Authority or even by High Courts.  Once revocation order has been passed the same shall be complied with the Department. 

In ‘VIDYUT MAJDOOR KALYAN SAMITI VERSUS STATE OF U.P. AND 3 OTHERS - 2021 (1) TMI 705 - ALLAHABAD HIGH COURT the petitioner is a registered society.  The petitioner failed to file monthly returns (GSTR-3B) for more than six months for the period from October to March in assessment year 2018-19 and from April to June in assessment year 2019-20.   a show cause notice was uploaded on the GST Portal on 22.08.2019 granting seven days time to the petitioner to show cause by the proper officer.   The petitioner never visited the portal and, therefore, did not file  reply to the show cause notice.  Therefore the proper officer cancelled the GST registration certificate vide their order dated 02.09.2019. 

Being aggrieved against the order the petitioner filed appeal before the Appellate Authority.  The Appellate Authority set aside the order of the lower authority and directed to restore the cancelled registration certificate with effect from 02.09.2019.  The petitioner also challenged the order before Additional Commissioner who also directed to restore the cancelled certificate. The order of the Appellate Authority was not carried out by the Department.  Therefore the petitioner filed the present writ petition seeking relief to restore the GST net work active status on the dashboard of the petitioner on the GST Portal and make all the tabs on the portal active in compliance of the order.           

The respondents submitted the following before the High Court-

• Restoration of the GST registration is the responsibility of the other.
• The petitioner should submit a fresh application and obtain a GST registration online.
•  Once petitioner's registration was cancelled, an application for its revocation should have been filed in form GST-REG-12 to such proper officer, within a period of thirty days from the date of the service of the order of cancellation of registration.
•  The petitioner is required to furnish details of old returns, tax, interest or penal interest along with his revocation application, which has not been done.
• The petitioner wrongly assailed the registration cancellation before the Additional Commissioner without applying for its revocation on the portal.
•  there can be no manual restoration of the GST registration and, therefore, the writ petitioner is liable to be dismissed. 

The High Court analyzed the entire case.  The High Court found that on a pointed query by the Court, counsel for the respondents have not been able to show that the order passed by the Commissioner, restoring petitioner's GST registration, is either illegal or without jurisdiction. The same in any case, is a judicial order and the respondents cannot take a plea that they shall not comply with an order passed by a competent authority.  The High Court also did not accept the contentions of the Department.  If the arguments of the respondents are accepted, the same in the opinion of the Court, will amount to travesty of justice.  It is not the fault of the petitioner and it is for the department and the respondents to make provisions for the same in the software and on the GST Portal.   Merely because such provision has not been made, the petitioner cannot be made to suffer and non compliance of an appellate order, passed by a competent appellate authority cannot be accepted or permitted on the plea raised in the counter affidavit or during the course of arguments.

The High Court allowed the petition and directed to restore petitioner's GST registration on the GST Portal.