GST authorities cannot embark upon the process of assessment, in the guise of considering the application of revocation of cancellation of registration.
Ramakrishnan Mahalingam Vs. State Tax Officer & Anr.
(IN THE HIGH COURT OF MADRAS)
Ramakrishnan Mahalingam (“the Petitioner”) was served with a show cause notice dated July 22, 2019 by the State Tax officer, GST (Respondent No. 1) calling upon the Petitioner to show cause as to why the GST registration should not be cancelled for non filing of returns for a continuous period of six months. Thereafter, the GST registration of the Petitioner was cancelled on September 16, 2019. The Petitioner against the aforesaid cancellation order filed two applications for revocation of cancellation of registration under Section 30 of the CGST Act, both the applications were rejected vide order dated July 24, 2020 and September 09, 2020 for non-compliance of the Petitioner to SCN issued and due to outstanding interest on belated payment of tax dues and for allegedly wrongful claim of input Tax Credit respectively.
That against the order dated July 24, 2020 the Petitioner preferred an appeal before the Deputy Commissioner (ST) (Respondent No. 2) and that was also rejected by the Respondent No. 2, Moreover a Deficiency Memo dated October 05, 2020 to the Petitioner for availing the ineligible ITC.
That on writ being preferred by the Petitioner against the aforesaid order of Respondent No. 2, the Hon’ble High Court held that:-
- In the guise of considering the application for revocation of cancellation of Petitioner’s GST registration, the Respondents cannot embark upon the process of assessment, thus the contention of the respondents that the revival of registration is conditional is misconceived.
- The assessment would have to be made 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 ITC.
- To state that registration will not be revived since the Petitioner has incorrectly availed of ITC would be putting the cart before the horse.
- The Petitioner has filed monthly returns as well as annual returns for the period January 2017-18 to 2018-19 and also remitted late fee for filing of belated returns, being the only conditions that are to be satisfied by the Petitioner for grant of revocation of cancellation of registration. Thus the cancellation of registration is incorrect and improper.
- Directed the respondent No. 1 to pass an order reviving the GST registration of the Petitioner and granted liberty to the Respondent No. 1 take up the matters of assessment afterwards, in accordance with law.