GST Authorities can’t deny Revocation of GST Registration for alleged incorrect ITC availment: Madras High Court [Read Order]

GST Authorities - Revocation of GST Registration - ITC availment - Madras HC - Taxscan

The Madras High Court ruled that the GST Authorities can not deny Revocation of GST Registration for alleged incorrect availment of Input Tax Credit (ITC).

The petitioner, Ramakrishnan Mahalingam was issued a GST Registration Certificate on August 02, 2018, effective from July 1, 2017. A Show Cause Notice dated July 22, 2019, was issued to the Petitioner, by the State Tax Officer, GST calling upon the Petitioner to show cause as to why the GST registration should not be cancelled since the Petitioner had not filed returns for a continuous period of six months. Thereafter, the GST registration of the Petitioner was canceled on September 16, 2019.

As against the order of cancellation, two applications were filed by the Petitioner for revocation of cancellation of registration under Section 30 of the CGST Act, which were rejected vide order dated July 24, 2020 and September 09, 2020 respectively due to non-compliance of the Petitioner to SCN issued and due to outstanding interest on belated payment of tax dues and for allegedly wrongful claim of ITC respectively.

Subsequently, an appeal before Deputy Commissioner was filed by the Petitioner against the order dated July 24, 2020. However, Respondent rejected the appeal of the Petitioner and issued the deficiency memo, on the grounds that the ITC availed by the Petitioner for various periods was ineligible and further instructed the Petitioner, to remit the amount due in order to have the appeal admitted.

The single judge bench of Justice Anita Sumanth said that registration will not be revived since the petitioner has incorrectly availed that ITC would be putting the cart before the horse. In fact, it is seen that the petitioner has filed monthly returns as well as annual returns for the periods January 2017-18 to September 2019-20 and for financial years 2017-18 and 2018-19 and has also remitted late fee for filing of belated returns.

Thus, and these being the only conditions that are to be satisfied by the petitioner for grant of revocation of registration, the court opined that the cancellation of the registration, in this case, is incorrect and improper.

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