GST registration cancellation revoked after successful appeal citing COVID-19 pandemic and financial difficulties under Section 30

The Commissioner (Appeals) CGST, Jaipur allowed the appellant's appeal against rejection of revocation application for cancelled GST registration. The proper officer had rejected the revocation application under Section 30 of CGST Act, 2017 citing non-compliance with prescribed time limits. The appellant argued that COVID-19 pandemic and financial difficulties prevented timely filing. Despite initial clerical errors in the appeal memo regarding order dates, the Commissioner found substantial compliance with CGST provisions as returns were filed up to cancellation date. The appeal was allowed, directing the proper officer to consider registration revocation.

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Issues Involved:
1. Cancellation of GST registration due to non-filing of returns.
2. Application for revocation of cancellation of GST registration.
3. Compliance with Section 30 of the CGST Act, 2017.
4. Impact of COVID-19 pandemic on filing of returns and applications.
5. Applicability of Supreme Court orders on extension of limitation periods.
6. Compliance with Rule 23 of the CGST Rules, 2017.

Detailed Analysis:

1. Cancellation of GST Registration Due to Non-Filing of Returns:
The GST registration of the appellant was canceled by the proper officer due to non-filing of returns for a continuous period of six months. A show cause notice was issued on 09.09.2020, but the appellant did not respond or file the pending returns. Consequently, the registration was canceled effective 18.03.2021 under Section 29 of the CGST Act, 2017, read with Rule 22 of the CGST Rules, 2017.

2. Application for Revocation of Cancellation of GST Registration:
The appellant applied for revocation of the GST registration on 07.05.2021. The proper officer issued a show cause notice on 20.05.2021 for rejection of the application, citing non-compliance with Section 30 of the CGST Act, 2017, and failure to pay the due interest. The application was ultimately rejected on 23.05.2021 for not being filed within the 30-day period post-cancellation.

3. Compliance with Section 30 of the CGST Act, 2017:
The appellant argued that the delay in filing the revocation application was due to the COVID-19 pandemic and financial difficulties. The proper officer rejected the application for non-compliance with Section 30, which requires filing within 30 days of cancellation.

4. Impact of COVID-19 Pandemic on Filing of Returns and Applications:
During the personal hearing, the appellant reiterated that the COVID-19 situation and financial problems prevented timely filing of returns and the revocation application. The appellant had filed all pending returns and paid the applicable taxes and late fees up to March 2021.

5. Applicability of Supreme Court Orders on Extension of Limitation Periods:
The Supreme Court, in Suo Motu Writ Petition (Civil) No.3 of 2020, extended the period of limitation due to the COVID-19 pandemic. The period from 15.03.2020 to 14.03.2021 was excluded from the limitation period, and a 90-day extension was provided from 15.03.2021. This extension was reiterated in subsequent orders due to the second wave of the pandemic.

6. Compliance with Rule 23 of the CGST Rules, 2017:
Rule 23 outlines the procedure for revocation of cancellation of registration. The appellant must file all due returns and pay any due taxes, interest, penalty, and late fees. The appellant had complied with these requirements by filing the returns up to the date of cancellation and paying the pending dues.

Conclusion:
The appeal was filed within the prescribed time limit under Section 107(1) of the CGST Act, 2017. The adjudicating authority's rejection of the revocation application was based on non-compliance with Section 30. However, considering the Supreme Court's orders on extension of limitation periods and the appellant's compliance with filing returns and paying dues, the appeal was allowed. The proper officer was directed to consider the revocation application after verifying the payment particulars and status of returns. The appeal was disposed of accordingly.

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