Fresh GST registration application rejection set aside due to unreasoned order and procedural lapses
The Patna HC allowed a writ petition challenging rejection of fresh GST registration application. The petitioner's previous registration was cancelled, and instead of seeking revocation or filing appeal, petitioner applied for fresh registration which was rejected without proper reasoning. The HC found that while fresh registration applications are not statutorily barred, the Proper Officer must record findings regarding non-filing of revocation application and continuation of conditions under Section 29(2)(b) and (c) of CGST Act. The rejection order was completely unreasoned and failed to comply with circular requirements. The notice seeking clarification made no reference to relevant statutory provisions. The HC set aside the rejection order and remanded the matter to Deputy Commissioner for fresh consideration of registration application.
ISSUES:
Whether an application for fresh GST registration can be rejected without assigning reasons, particularly when the applicant alleges technical impossibility in filing returns.Whether the rejection of fresh GST registration is barred by statute when the earlier registration was cancelled and no revocation application was filed.Whether the proper officer is required to record specific findings under CBIC Circular No. 95/14/2019-GST dated 28.03.2019 before rejecting a fresh GST registration application.Whether an unreasoned order rejecting GST registration application is liable to be set aside.Whether the petitioner is entitled to file GST returns only up to the period allowed by the GST portal due to technical limitations.
RULINGS / HOLDINGS:
The Court held that the fresh application for GST registration is not barred by statute; however, the proper officer must ascertain if the application for revocation of cancellation was filed and whether the conditions under clauses (b) and (c) of sub-section (2) of Section 29 of the CGST Act are still continuing, as per the CBIC Circular No. 95/14/2019-GST.The rejection order (Annexure 'P/6') was found to be a "completely unreasoned order" without any recorded findings as required by the circular, and therefore, it is liable to be set aside.The petitioner's grievance regarding the inability to file returns beyond February 2023 due to "technical limitations on the website of GST" was acknowledged, and the Court recognized that no further returns could be made beyond what the portal allowed.The Court set aside the order of rejection and remitted the matter for fresh consideration, directing the proper officer to provide the petitioner an "appropriate opportunity to comply with the requirements" before passing any order.
RATIONALE:
The Court relied on the statutory framework under Section 29(2) of the Central Goods and Services Tax Act, which authorizes cancellation of registration for non-filing of returns and other grounds.The Court applied the CBIC Circular No. 95/14/2019-GST dated 28.03.2019, which requires proper officers to verify if revocation applications have been filed and whether the conditions leading to cancellation persist before rejecting fresh registration applications.The Court emphasized the necessity of reasoned orders recording findings as mandated by the circular and statutory provisions, rejecting the validity of unreasoned orders.The Court recognized the petitioner's inability to comply due to "technical limitations" on the GST portal, reflecting a practical consideration in the application of statutory compliance requirements.No dissent or doctrinal shift was indicated; the judgment adhered to established statutory interpretation and procedural fairness principles.
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