GST Registration cannot be Cancelled Solely on Ground of Delay in Revocation when Dept Accepted Returns and Tax Dues: Allahabad HC [Read Order]

The Allahabad High Court has held that the GST registration cannot be canceled merely on round of delay in filing of revocation application once the assessee filed all the returns and paid the dues and the Government has accepted the same.

The GST registration of the petitioner, Mr. Umesh Kumar was cancelled due to non-filing of the return. The assessee after coming to know about the cancellation of registration had deposited the entire tax on 30th January, 2021 and had also filed return before the concerned authority. On 17.2.2021 the Assistant Commissioner rejected the revocation application of the petitioner on the ground that the return was not filed within time. The appeal of the petitioner was also rejected by the First Appellate Authority on the ground that the return was not filed within time.

Justice Rohit Ranjan Agarwal fond that under Rule 23 of Rules, 2017, it has been specifically mentioned that the revocation application has to be preferred within 30 days from the date of service of order of cancellation of registration.

The Court further observed that the purpose of inserting the provision under Rule 23 of Rules, 2017 as to service of notice upon the assessee is to provide an opportunity to him to move a revocation application so as to save the registration from being cancelled permanently and his business being hampered.

“The Act and the Rules have been brought so as to see the business is run smoothly and is not hampered by the intricacies of the provisions of the Act. The coordinate Bench of this Court in M/s Ansari Constructions (supra) while dealing with Section 29 of the GST, 2017 and Rule 23 of Rules, 2017, has held that once the Department has accepted the return and there remains no dues, the Department should not obstruct the business of an assessee,” the Court said.

Granting relief to the assessee, the Court further held that “In the present case, as the petitioner has come with the case that he has deposited the entire tax and has filed return in the year 2021, the said Act having not been denied by the State, the rejection of registration solely on the ground of delay in moving the revocation application, is not sustainable in law. Moreover, the Appellate Authority has not recorded any categorical finding as to the service of notice and merely on the ground that the application was time barred, proceeded to uphold the order of rejection of revocation application.”

To Read the full text of the Order CLICK HERE

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