The Patna High Court has recently directed the assessee to apply for revocation of cancellation of Goods and Services Tax (GST) registration when the same was canceled for non-filing of returns.
The petitioner approached the Patna High Court aggrieved with the cancellation of registration by Annexure- 2 order dated 22.04.2022. An appeal was filed which was delayed, which also stood rejected.
The Division Bench of Chief Justice K. Vinod Chandran and Justice Madhuresh Prasad observed that, “Insofar as the Bihar Goods and Services Tax Act is concerned, now there is no Tribunal constituted for the State.”
Since the Counsel for the petitioner, Archana Sinha and Archana Shah argued that the order of cancellation of the Goods and Services Tax registration was non-speaking order, the bench decided to look into the order of cancellation. From the order, it was noted that there was no reason stated as to why the cancellation was ordered and not even the subject of the notice was referred to in the order.
The Counsel for the state, Additional Solicitor General K N SIngh submitted that the form GST REG-19 was adopted by the Assessing Officer.
At this instance, the Bench observed that, “from the Bihar Goods and Services Taxes Rules, 2017, GST REG-19 has a specific column where reasons have to be assigned. However, the Assessing Officer seems to be laboring under the belief that when an assessee does not appear or an objection is not filed, no reasons have to be assigned.”
The Bench thus held that, “We cannot countenance the said order, especially when there is absolutely no reason stated regarding the cancellation of registration.”
However, in view of the CBIC Notification No. 3 of 2023 that had been brought in by the Central Government on the recommendations of the GST Council wherein if the cancellation has been effected for failure to file returns under clause (b) or clause (c) of Sub-section (2) of Section 29, there is a further period allowed up to 30.06.2023, wherein the registered person can apply for invocation of cancellation, the Bench directed the petitioner to apply for revocation of cancellation of GST registration.
It was also noted by the Patna High Court that, “This is also subject to the condition that the return should be filed up to the effective date of cancellation of registration and the payment of tax, interest, penalty and late fee in respect of such returns have also been made. The assessee would also be entitled to avail of the said remedy if the cancellation has been effected under clause (b) or clause (c) of Sub-section (2) of Section 29 of the Goods and Services Tax Act, 2017.”
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