TaxTMI 
TaxTMI 
2022 (6) TMI 273
X X X X Extracts X X X X
X X X X Extracts X X X X
....e petitioners in the respective Writ Petitions and the learned Special Government Pleader, learned Senior Standing Counsel for the respective respondents. 151. There are broadly four categories of cases. Some of the petitioners have directly challenged the order of cancellation of GST registration passed under Section 29 of the respective GST Acts. All these petitioners had a remedy to file an application under Section 30 of the respective GST Acts for revocation of cancellation of the registration in time subject to the conditions prescribed therein or to file an appeal before the Appellate Authority under Section 107 of the respective GST Acts. 152. As far as the second category of cases in W.P.No.14241 of 2020 is concerned, the petitioner has exercised the above option by filing application under Section 30 of the respective GST Acts. However, the Original Authority has rejected the same on the ground that the petitioner has not filed any reply to the notice dated 26.08.2020. 153. The third and fourth categories of cases are similar. After the orders of cancellation of GST registration were passed, these petitioners, instead of choosing to file an appl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces Tax Act, 2017 and respective State/Union Goods and Services Tax Act, 2017. This was reconciled by the Central Government by issuing Circular No.1/2017, dated 20.09.2017. Relevant portion of Circular No.1/2017, dated 20.09.2017 is reproduced below:- Based on the decisions taken in the 9th Meeting of the GST Council held on 16 January, 2017 and 21st Meeting of the GST Council held on 9 September, 2017, the following criteria should be followed for the division of taxpayer base between the Centre and the States to ensure single interface: i. Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration; ii. In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Central and the State tax administration; iii. The division of taxpayers in each State shall be done by computer at the State level based on stratified random sampling and could also take into account the geographical location and type of the t a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ouses of the Parliaments and the Legislative Assemblies of the State and Union Territories, nevertheless these enactments are comprehensive and detailed with few design faults which have procedural ramification. 160. As per section 39 of the respective GST enactments, every registered person, other than an Input Service Distributor of a non-resident taxable person or a person paying tax under the provisions of Sections 10 or 51 or 52 shall, for every calendar month or part thereof, furnish, a return, electronically, of inward and outward supplies of goods or services on both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and in such manner and in such time, as may be prescribed. 161. As per sub-clause (10) to Section 39 of the respective CGST and TNGST, a registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous period has not been furnished. As per the notes on clauses to the above Section, taxes are to be paid by due date of filing of the return. 162. This clause also provides for the time limit up to which rectification of any omission or incorrect partic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker; (iii) the expression "special category States" shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution. 164. As per Section 22(2) of the Central Goods and Services Tax Act, 2017, every person who, on the day immediately preceding the appointed day, was registered or held a license under an existing law, shall be liable to be registered under the Act with effect from the appointed day. 165. Section 25 of the respective GST enactment contemplates the procedure for registration. Section 25 of the CGST Act, 2017 reads as under: 25. (1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: Provided that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch person in such manner as may be prescribed. (9) Notwithstanding anything contained in subsection (1),-- (a) any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries; and (b) any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as may be prescribed. (10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed. (11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed. (12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thout giving the person an opportunity of being heard. (3) The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation. (4) The cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of registration under this Act. (5) Every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semifinished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed: Provided that in case of capital goods o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... deals with a situation where, a proper officer may cancel the registration of a person from such date, including a retroprospective date, as he may deem such. 169. All the cases under consideration fall under situation under Sub Clause (2)(c) i.e "where a registered person other than the person specified in Clause (b) has failed to furnish returns for a continuous period of 6 months". 170. All these petitioners were issued with a proper notice as is contemplated under the aforesaid provision. The orders were also passed after giving petitioners sufficient opportunity of being heard. Majority of the petitioners failed to respond notices issued by the respondent State Tax Officer proposing the cancellation of the registration of the respective petitioners. 171. One of the options available noticee whose registration is cancelled, is to approach the same authority for revocation of cancellation of the registration in the manner prescribed within 30 days from the date of service of cancellation of registration. 172. When Section 30 was incorporated in the respective GST enactments with effect from 1st July, 2017, there was no proviso to Section 30(1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der sub-section (1) of section 30 of the Act, against such order passed up to 31.03.2019, shall be allowed to file application for revocation of cancellation of the registration not later than 22.07.2019." 175. This was a novel and an unconventional method adopted to amend the Act. It was contrary to the well established procedure under the Constitution and Law for amending a statute. The above amendment was a stop gap arrangement. As per the aforesaid proviso which was inserted to Section 30(1) of the Act, wherever cancellation orders had been passed upto 31.03.2019 and application for revocation was not filed within thirty (30) days under Sub-Section 1 to Section 30, an option was given to file an application for revocation of cancellation of the registration not later than 22.07.2019. 176. Implementing requirement of section 30 of the GST enactments, Rule 23 of the GST Rules, 2017 has been prescribed. Section 30 of the GST enactments and Rule 22 of the GST Rules 2017 are reproduced below:- Section 30 of the GST Act Rule 22 of the GST Rules, 2017 (1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ull payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST-REG 20] 17 (5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself. 177. An alternate remedy is also available in the order of cancellation by way of appeal under Section 107 of the respective GST enactments which option has been exercised by some of the writ petitioners but beyond the period of limitation. 178. A reading of Section 29 of the Act respective GST enactments also makes it clear that cancellation of registration under the aforesaid section does not affect the liability of a person to pay tax and other dues under the Act or discharge any obligation under the said Act and the rules made under for any period prior to the date of cancellation, whether or not such tax and other dues are determined before or after the date of cancellation. They also make it clear that cancellation of registration under anyone of the other GST enactments shall be deemed to be cancellation of registration u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d expired between 20.03.2020 to 29.06.2020 by extending the period upto 30.06.2020 vide Notification No.35/2020 - Central Tax, Central Board of Indirect Taxes and Customs, dated 03.04.2020. 185. This Notification was issued in the exercise of power conferred under Section 168A of the Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act, 2017 and Section 21 of the Union Territory Goods and Services Tax Act, 2017. This did not address the case of the above petitioners. 186. However, on 25.06.2020, the Central Government on the recommendations of the Council, in the exercise of power conferred under Section 172 of the Central Goods and Services Tax Act, 2017, issued the Central Goods and Services Tax (Removal of Difficulties) Order, 2020 vide Order No.01/2020-Central Tax, Central Board of Indirect Taxes and Customs, dated 25.06.2020. Relevant portion of the said Notification reads as under:- 1. Short title.- This Order may be called the Central Goods and Services Tax (Removal of Difficulties) Order, 2020.- 2. For the removal of difficulties, it is hereby clarified that for the purpose of calculat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eriod not exceeding thirty days, beyond the period specified in clause (a).". 192. By Notification No.92/2020-Central Tax, dated 22.12.2020, the Central Government appointed the 1st day of January, 2021 as the date on which the provisions of Section 119, 120, 121, 122, 123, 124, 126, 127 and 131 of the Act shall come into force. Thus, Section 30 of the GST Acts, came into force with effect from 1st day of January, 2021. The said Notification reads as under:- Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No 92/2020-Central Tax New Delhi, the 22nd December, 2020 S.O. ...... (E).- In exercise of the powers conferred by sub-section (2) of section 1 of the Finance Act, 2020 (12 of 2020) (hereinafter referred to as the said Act), the Central Government hereby appoints the 1st day of January, 2021, as the date on which the provisions of sections 119, 120, 121, 122, 123, 124, 126, 127 and 131 of the said Act shall come into force. [F.No. CBEC-20/06/04/2020-GST] 193. Parallel amendments were made to Rule 23 of the respective GST Rules and FORM GST REG-21 was amend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The proper officer may, for reasons to be recorded in writing, under circumstances other than those specified in clause (a), by an order in FORM GST REG-05, reject the application for revocation of cancellation of registration and communicate the same to the applicant. 3) The proper officer shall, before passing the order referred to in clause (b) of sub-rule (2), issue a notice in FORM GST REG-23 requiring the applicant to show cause as to why the application submitted for revocation under sub-rule (1) should not be rejected and the applicant shall furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24. Upon receipt of the information or clarification in FORM GST REG-24, the proper officer shall proceed to dispose of the application in the manner specified in sub-rule (2) within a period of thirty days from the date of the receipt of such information or clarification from the applicant. 194. The above amendment however did not address the case of the petitioners whose registrations were cancelled after 31.03.2019 and before the above amendment to the Act as Rules with effect from 01.01.2021. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ugust, 2021, the time limit for making such application shall be extended upto the 30th day of September, 2021. [F. No. CBIC-20006/24/2021-GST] 198. The Central Government in the above Notification took a decision to extend the time limit upto 30.09.2021 for the persons like petitioners. However, this was applicable to those registration which had been cancelled and time limit for filing application for revocation of cancellation of registration had expired during the period commencing from the 1st day of March, 2020 to 31st day of August, 2021. Thus, the time limit for making such application stood extended upto the 30th day of September, 2021. 199. In the light of the above Notification, the Principal Commissioner has also issued clarification vide Circular No.158/14/2021-GST, Central Board of Indirect Taxes and Customs, dated 06.09.2021, while, tracing out the history, in paragraph Nos.3 and 4, it has been clarified as follows:- Paragraph No.3 Paragraph No.4 3.1. The said notification specifies that where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h cases, taxpayer may file a fresh application for revocation and the officer shall process the application for revocation considering the extended timelines as provided vide the said notification. iv. application for revocation of cancellation of registration was filed, the proper officer rejected the application and appeal against the rejection order is pending before appellate authority- In such cases, appellate authorities shall take the cognizance of the said notification for extension of timelines while deciding the appeal. revocation of cancellation of v. application for revocation of cancellation of registration was filed, the proper officer rejected the application and the appeal has been decided against the taxpayer- In such cases, taxpayer may file a fresh application for revocation and the officer shall process the application for revocation considering the extended timelines as provided vide the said notification. 4. It may be recalled that, with effect from 01.01.2021, proviso to Subsection (1) of 30 of the CGST Act has been inserted which provides for extension of time for filing application for revocation of cancellation of reg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1, with the extension of timelines by another 30 days beyond 30.09.2021 by the Joint/ Additional Commissioner and another 30 days by the Commissioner, on being satisfied, as per proviso to sub-section (1) of section 30 of the CGST Act. 200. None of the petitioners took advantage of the extension of time granted in the above Notification for revocation of cancellation of registration. Instead, some of them have filed appeals before the Appellate authority. 201. By Circular No.157/13/2021-GST, the Central Board of Indirect Taxes and Customs, GST Policy Wing, dated 20.07.2021, it was classified as follows:- 4. On the basis of the legal opinion, it is hereby clarified that various actions/compliances under GST can be broadly categorised as follows:- a) Proceedings that need to be initiated or compliances that need to be done by the taxpayers:- These actions would continue to be governed only by the statutory mechanism and time limit provided/ extensions granted under the statute itself. Various orders of the Hon'ble Supreme Court would not apply to the said proceedings/ compliances on part of the tax payers. b ) Quasi-Judicial proce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. IV. The Government of India shall amend the guidelines for containment zones, to state. "Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements." 204. This Court, by its order dated 22.09.2021 in Tvl.Sunpenta Mining Service Private Limited Vs. The Assistant Commissioner (ST), Salem, in W.P.Nos.20083 and 20086 of 2021, and order dated 01.10.2021, in Suresh Trading Corporation Vs. The Asst. Commissioner (Circle) of SGST, Coimbatore II, in W.P.No.21109 of 2021, granted time for filing fresh application for revocation of the cancellation of registration. 205. Though the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cognised assesses from coming back into the GST fold. 209. Thus, the intention of the Government has been to allow the persons like the petitioners to file a fresh application and to process the application for revocation of the cancellation of registration by the officers. 210. In my view, no useful purpose will be served by keeping these petitioners out of the bounds of GST regime under the respective GST enactments other than to allow further leakage of the revenue and to isolate these petitioners from the main stream contrary to the objects of the respective GST enactments. 211. The purpose of GST registration is only to ensure just tax gets collected on supplies of goods or service or both and is paid to the exchequer. Keeping these petitioners outside the bounds of the GST regime is a self defeating move as no tax will get paid on the supplies of these petitioners. 212. May be, organised companies who comply with the requirement of GST enactments may not give business with these petitioners. However, by keeping the petitioners out of the bounds of GST law, purpose of the Act will not be achieved. It will also not mean that the petitioners w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ous clarifications issued by the Central Government pursuant to the decision of the GST Council and the Notification issued thereunder the respective enactments also make it clear, intention is to only facilitate and not to debar and de-recognised assesses from coming back into the GST fold. 221. While exercising jurisdiction, under Article 226 of the Constitution, the powers of the Court to do justice i.e., what is good for the society, can neither be restricted nor curtailed. This power under Article 226 can be exercised to effectuate the rule of law. 222. Therefore, power of this Court under Article 226 of the Constitution of India is being exercised cautiously in favour of the petitioners as this power is conceived to serve the ends of law and not to transgress them. 223. In Mafatlal Industries Ltd. Vs. Union of India, (1997) 5 SCC 536, in Paragraph No.77, the Hon'ble Supreme Court observed that "So far as the jurisdiction of the High Court under Article 226 - or for that matter, the jurisdiction of this Court under Article 32 - is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally ob....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay impose penalty with the gravity of lapses committed by these petitioners by issuing notice. If required, the Central Government and the State Government may also suitably amend the Rules to levy penalty so that it acts as a deterrent on others from adopting casual approach. 229. In the light of the above discussion, these Writ Petitions are allowed subject to the following conditions:- i. The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid. ii. It is made clear that such payment of Tax, Interest, fine / fee and etc. shall not be allowed to be made or adjusted from and out of any Input Tax Credit which may be lying unutilized or unclaimed in the hands of these petitioners. iii. If any Input T....