Vijay Kumar Jain vs Central Goods & Service Tax And Central ... on 3 April, 2023

Here's a summary of the judgment:

1. Outcome

The High Court disposed of the writ petition, directing the petitioner to approach the proper officer for revocation of cancellation of registration by June 30, 2023, in accordance with Notification No. 03/2023-Central Tax dated March 31, 2023. The Court clarified that the impugned orders of cancellation and the appellate order rejecting the appeal would not impede the proper officer from considering the revocation application under the said notification.

2. Core Issue

The core issue was whether the petitioner, whose GST registration was cancelled due to non-filing of returns and whose appeal against such cancellation was rejected as time-barred, could avail the benefit of the newly issued Notification No. 03/2023-Central Tax to apply for revocation of the cancelled GST registration.

3. Key Facts

• The petitioner's GST registration was cancelled via an Order-in-Original dated May 12, 2022 (Form GST REG-19), under Section 29(2)(b) or (c) of the CGST Act, for non-compliance (likely non-filing of returns).
• The petitioner's appeal against the cancellation order was rejected by an order dated February 17, 2023, on the ground that it was time-barred under Section 107(1) and (4) of the CGST Act.
• The petitioner then filed the present writ petition seeking to quash both the Order-in-Original and the Appellate Order and to restore their GST registration.
• During the pendency of the writ petition, the Central Government issued Notification No. 03/2023-Central Tax, G.S.R. 246(E), dated March 31, 2023.

4. Arguments (Taxpayer vs Revenue)

• Taxpayer (Petitioner):

  • Argued that Notification No. 03/2023-Central Tax provides a beneficial window for registered persons whose registration was cancelled under Section 29(2)(b) or (c) on or before December 31, 2022, to apply for revocation of cancellation until June 30, 2023.
  • Emphasized that the notification's "Explanation" specifically covers cases where appeals against cancellation or rejection of revocation applications were dismissed solely on the ground of failure to adhere to time limits under Section 30(1).
  • Expressed willingness to comply with all conditions of the notification, including furnishing due returns and paying all outstanding tax, interest, penalty, and late fees.
  • Requested that the impugned orders be set aside to allow them to avail this remedy, as their business had come to a standstill.

• Revenue (Respondents):

  • Despite not filing a counter affidavit, learned counsel for CGST conceded that in light of Notification No. 03/2023-Central Tax, the petitioner could avail the opportunity to seek revocation by complying with the prescribed conditions.
  • Acknowledged that the appeal was previously rejected as time-barred under Section 107(1) and (4) of the CGST Act.

5. Court’s Reasoning

• The Court noted the petitioner's failure to comply with Section 29(2)(b) and (c) of the CGST Act.
• Crucially, the Court highlighted Notification No. 03/2023-Central Tax, dated March 31, 2023, issued by the CBIC under Section 148 of the CGST Act, based on the GST Council's recommendation.
• The Court explained that this notification allows registered persons whose registration was cancelled under Section 29(2)(b) or (c) on or before December 31, 2022, to apply for revocation of cancellation until June 30, 2023.
• It reiterated the conditions for availing this opportunity: furnishing all due returns up to the effective date of cancellation and payment of all tax, interest, penalty, and late fees. It also noted that no further extension would be granted.
• The Court placed significant emphasis on the "Explanation" to the notification, which explicitly includes persons whose appeals against cancellation orders or rejection of revocation applications were dismissed due to time limits under Section 30(1).
• Considering the beneficial nature of the notification, intended to ameliorate the difficulties faced by registered persons whose businesses were impacted by cancelled registrations, the Court decided to allow the petitioner to avail this opportunity.
• The Court did not formally quash the impugned orders but ensured that they would not hinder the proper officer from considering the new application for revocation under the specific provisions of the notification.

6. Statutory References

• Central Goods and Services Tax Act, 2017 (CGST Act, 2017):
  • Section 29(2)(b) & (c): Grounds for cancellation of registration.
  • Section 30(1): Procedure for revocation of cancellation of registration.
  • Section 107(1) & (4): Provisions related to appeals.
  • Section 148: Power to issue special procedures.
• Notification No. 03/2023-Central Tax, G.S.R. 246(E), dated March 31, 2023, issued by the C.B.I.C.

7. Precedents Cited

None explicitly cited in the judgment.