2023 (4) TMI 1123 - HC - GST

Partnership Firm Wins Temporary Relief in GST Registration Dispute, Seeks Restoration of Tax Credit Under Notification 3/2023

HC Gujarat allowed a partnership firm's petition challenging GST registration cancellation. The court directed the competent authority to process the ... Revocation of cancellation of GST registration - cancellation of registration for non-filing of returns - application of notification No. 3/2023 dated 31.3.2023 - competent authority to consider revival applications - entitlement to avail Input Tax Credit during period of cancellationApplication of notification No. 3/2023 dated 31.3.2023 - revocation of cancellation of GST registration - competent authority to consider revival applications - Petitioner permitted to apply to the competent authority for revocation of cancellation of GST registration under the notification dated 31.3.2023 and the authority directed to consider the application. - HELD THAT: - The court noted that notification No. 3/2023 dated 31.3.2023 contemplates revocation of cancellation of registration effected on the ground of non-filing of GST returns if conditions are fulfilled. The petitioners were held to fall within the scope of that notification so far as entitlement to seek its benefit is concerned. The petitioners were therefore permitted to make an application to the competent authority invoking the said notification, and the competent authority was directed to deal with such application and give the benefit of the notification as warranted. The court expressly refrained from expressing any opinion on the merits of the underlying cancellation itself, leaving merits to be considered by the competent authority when it adjudicates the application. [Paras 3, 4, 5]Petitioner allowed to apply for revocation under Notification No. 3/2023; competent authority to consider and grant benefit; court made no expression on merits.Entitlement to avail Input Tax Credit during period of cancellation - cancellation of registration for non-filing of returns - Petitioner entitled to lodge claim for Input Tax Credit for the period from cancellation of registration until restoration when the competent authority considers revocation. - HELD THAT: - The court observed that if the competent authority, while considering the revocation application under the notification, restores the registration, the petitioner shall be entitled to lodge its claim for availment of Input Tax Credit in respect of the period from the date of cancellation until the date registration is restored. This entitlement to lodge the claim was left subject to the competent authority's consideration and determination in accordance with law. [Paras 6]Petitioner entitled to claim Input Tax Credit for the intervening period subject to the competent authority's consideration on revocation and restoration.Final Conclusion: Writ petition disposed permitting the petitioner to apply for revocation of GST registration cancellation under Notification No. 3/2023; competent authority directed to consider the application and, in the event of restoration, the petitioner permitted to lodge claim for Input Tax Credit for the period from cancellation until restoration; no opinion expressed on merits by the court. Issues:The judgment involves the challenge to the cancellation of Goods and Services Tax (GST) registration of a partnership firm engaged in real estate projects due to non-filing of GST returns. The main issue is whether the cancellation of registration can be revoked based on a subsequent notification issued by the competent authority under the GST Act.Summary:The High Court of Gujarat heard the petition challenging the cancellation of GST registration of a partnership firm engaged in real estate projects for not filing GST returns. The cancellation order was dated 11.1.2022 but had an effect from 10.09.2021. During the hearing, it was brought to the court's attention that the competent authority had issued Notification No. 3/2023 dated 31.3.2023, which provided a mechanism for revoking cancellations based on non-filing of GST returns.The notification was deemed beneficial to the petitioners, and it was argued that the petitioners' case fell within the scope of the notification. Consequently, the court permitted the petitioner to apply to the competent authority for the benefits outlined in the notification dated 31.3.2023. Upon receiving such an application, the competent authority was directed to process it and extend the benefits of the notification to the petitioner.The court clarified that it did not express any opinion on the merits of either party's case. Additionally, the petitioner raised concerns about claiming Input Tax Credit for the period between the cancellation and restoration of GST registration. The court noted that the petitioners could claim Input Tax Credit for the said period once the competent authority considers revoking the cancellation of registration under the notification.Ultimately, the petition was disposed of with the above directions and observations, and direct service of the order was permitted.