2026 (2) TMI 389 - HC - GST

GST registration revocation allows applications for reinstatement, return filing and instalment tax payments; bank defreeze subject to security

Cancellation of GST registration disables filing of GSTR-1 and GSTR-3B, preventing taxpayers from submitting invoice-level and summary returns and from ... Revocation of cancellation of GST registration - filing of statutory returns after revocation of registration - payment of tax dues in instalments u/s 80 - defreezing of bank accounts conditional on filing applications and furnishing security - security under Rule 159(5) of the Assam GST Rules, 2017 - adjustment of interim payments against outstanding tax liability - administrative disposal of applications within prescribed time-frame - HELD THAT:- It is stated that the GST Registration of the Firm was cancelled vide Order dated 15.09.2021, bearing Reference No. ZA180921017315O. And once GST registration is cancelled, the GST portal disables filing of regular returns i.e. GSTR-1 & GSTR-3B and it is a system driven restriction. Therefore the petitioners are not in a position to file the pending monthly returns for the remaining part of FY 2021-22 and the subsequent period thereafter. But, the basic relationship between GSTR-1 and GSTR-3B is that GSTR-1 is a return of outward supplies containing invoice wise details of taxable supplies, Zero rated supplies, exempted/nil rated supplies including debit note/credit notes and GSTR-3B is a summary return for self-assessed tax liability and payment of tax made and also claim of input tax credit (ITC). And unless cancellation of the GST is revoked the petitioners are not in a position to file the necessary returns and the correct GST dues of the petitioner firm and also it would not be in a position to clear the outstanding amount unless the ban accounts are defreeze. This Court is inclined to dispose of this petition by granting liberty to the petitioners to file an application for revocation of the GSTIN cancellation and thereafter, to file an application for allowing them to file return and also to file an application under Section 80 of the CGST Act, 2017, allowing them to clear the liability in installments and on such application being filed, the bank accounts of the petitioners shall be defreezed. However, this deferezing is subject to the condition that the petitioners shall file sufficient security in terms of Rule 159(5) of the Assam GST Rule, 2017. The petitioners are granted one week time to file the application, as mentioned hereinabove, and on such application being filed, the respondent authorities, within a period of two weeks, shall dispose of the same. Issues: Whether the petitioners should be granted liberty to apply for revocation of GST registration cancellation, to file pending returns and to seek permission under Section 80 of the Central Goods & Services Tax Act, 2017 for payment of outstanding liability in installments, and whether their bank accounts should be defreezed pending disposal of such applications subject to conditions.Analysis: The Court considered the petitioners' stated willingness to file pending returns and to clear outstanding GST liabilities and the respondents' position that revocation of cancellation must precede filing of returns and that defreezing of bank accounts is contingent upon payment, sufficient security or the satisfaction of the Commissioner. The Court noted the statutory framework allowing revocation of cancellation and the procedure for applications under Section 80 for instalment payment, and observed that procedural steps are available to the petitioners to regularise their compliance. The Court recorded the parties' agreement on timelines for filing and disposal of the requisite applications and the respondents' concurrence to adjust any payments already made against liability.Conclusion: Liberty is granted to the petitioners to file an application for revocation of GST registration cancellation, to file pending returns and to apply under Section 80 of the Central Goods & Services Tax Act, 2017 for instalment payment; on filing such applications within the time directed, the respondent authorities shall defreeze the petitioners' bank accounts, subject to the petitioners furnishing sufficient security in terms of Rule 159(5) of the Assam GST Rules, 2017, and the respondents disposing of the applications within the stipulated period. The decision is in favour of the petitioners.