Durga Raman Patnaik Vs Additional Commissioner of GST (Orissa High Court)
Orissa High Court requested the proper officer to grant opportunity to the petitioner for taking all required step to revive registration and also permitted to pay pending GST tax and file the pending GST return prior to cancellation of GST registration u/s 29(2)(c).
Facts-
The petitioner contended that in terms of show cause notice dated 21.08.2019, without assigning any reason, the Superintendent proceeded to cancel its GST registration on 15.10.2019 invoking provision of section 29(2)(c) of CGST Act with effect from 15.10.2019 inasmuch as there was non-filing of returns for consecutive period of six months.
Instead of seeking revocation of cancellation of registration u/s. 30 of the CGST Act before the proper officer, assailing aforementioned order dated 15.10.2019, the petitioner preferred appeal under Section 107 of the CGST Act on 05.08.2021 with a delay of around 660 days which came to be rejected on 07.10.2021.
Conclusion-
Held that the writ petition is maintainable challenging the order in appeal, albeit the petitioner is entitled to carry the matter before the Appellate Tribunal under Section 112 of the CGST Act inasmuch as even after lapse of 5 years, the said Appellate Tribunal is not constituted under Section 109.
The introduction of GST regime presupposes hassle-free and citizen friendly taxation process and the taxpayer is not to be treated as a person hostile to the Department. It is but obvious that if the taxpayer adopts clandestine business and adopts dubious device to evade payment of tax, then he has to be dealt with sternly. This Court requests the proper officer to grant opportunity to the petitioner for taking all required step to revive registration.
Held that the petitioner is permitted to file returns for the period prior to the cancellation of registration, if such returns have not already been filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and statutory payments and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of sixty days (60) days from the date of receipt of a copy of this Judgment, if it has not been already paid.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. The petitioner, proprietorship concern of Sri Durga Raman Patnaik with legal name and trade name “DURGA RAMAN PATNAIK” registered under the provisions of the Central Goods and Services Tax Act, 2017 (referred to as “CGST Act”), while assailing the Order dated 07.10.2021 passed in Appeal bearing No.228/BBSR-GST/APPEAL/2021 by the Additional Commissioner, GST (Appeals) (for brevity referred to as “Appellate Authority”) vide Annexure-1, questioned the propriety of Order dated 21.08.2019 of Superintendent, Berhampur-I Range, Berhampur Division (for short, “Registering Authority”), who, in exercise of power under Section 29(2)(c) of the said Act, has cancelled the registration (Annexure-4).
2. Fact leading the petitioner to approach this Court to beseech invocation of extraordinary jurisdiction under the provisions of Article 226/227 of the Constitution of India, 1950, is that by referring to reply dated 31.08.2019 submitted by the petitioner in pursuance of terms of Show Cause Notice dated 21.08.2019, the Superintendent of Ganjam-I Circle in Berhampur-I Range without assigning any reason proceeded to cancel the registration, GSTIN: 21ALPPP8146E2ZY on 15.10.2019 invoking provisions of Section 29(2)(c) of the CGST Act with effect from 15.10.2019 inasmuch as there was non-filing of returns for consecutive period of six months.
2.1. Instead of seeking revocation of cancellation of registration under Section 30 of the CGST Act before the proper officer, assailing aforementioned order dated 15.10.2019, the petitioner preferred appeal under Section 107 of the CGST Act on 05.08.2021 with a delay of around 660 days which came to be rejected on 07.10.2021.
2.2. It is submitted by the counsel for the petitioner that while the Appellate Authority made an observation in his Appellate Order that application for revocation of cancellation of registration as envisaged in Section 30 of the CGST Act read with Rule 23 of the Central Goods and Services Tax Rules, 2017 (abbreviated as, “CGST Rules”) being not filed within prescribed period, instead of rejecting the appeal on the ground of limitation by taking pedantic view, should have appreciated genuine difficulty faced by not only the petitioner but also other similarly placed suppliers and recipients and relegated him for availing the benefit of said remedial recourse of revocation of order of cancellation of registration under said provision as there is no outer limit provided under afore-mentioned provisions and the delay for sufficient reason being shown can be condoned.
2.3. Urging that the Appellate Authority ought to have shown pragmatic approach by taking a lenient view, referring to Notification No.19/2021— Central Tax, dated 01.06.2021, issued by Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs, it has been submitted that it has provided relief to the taxpayers by reducing/waiving late fee for non-furnishing Form GSTR-3B for the tax periods from July, 2017 to April, 2021, if the returns for these tax periods are furnished between 01.06.2021 to 31.08.2021. However, by virtue of Notification No. 33/2021— Central Tax, dated 29.08.2021, the last date to avail benefit of the amnesty scheme was extended from 31.08.2021 to 30.11.2021.
2.4. Based on the multiple representations received, Government by issue of Notification No. 34/2021— Central Tax [GSR No.600(E)], dated 29.08.2021 have also extended the timelines for filing of application for revocation of cancellation of registration to 30.09.2021, where the due date of filing of application for revocation of cancellation of registration falls between 01.03.2020 to 31.08.2021. The extension was made applicable only in those cases where registrations were cancelled under clause (b) or clause (c) of sub-section (2) of Section 29 of the CGST Act.
2.5. Such an extension by way of amnesty scheme and extension of time limit for filing of application for revocation of cancellation of registration was promulgated as a benevolent gesture of the Government keeping in mind on the advent of GST regime with effect from 01.07.2017 adverse situations were faced by suppliers/recipients/taxpayers especially small taxpayers. Due to lack of awareness regarding nuances of “strict compliance” of new taxation policy, they could not file their returns in time. Such difficulties were multiplied by outbreak of Severe Acute Respiratory Syndrome-associated corona virus (SARS-CoV) leading to COVID-19 pandemic. Consequently, such situation was declared force majeure which led to promulgation of Section 168A by way of the CGST (Amendment) Act, 2020 granting power to the Government to extend time limit in special circumstances.
2.6. It is, therefore, argued by the counsel for the petitioner that the Appellate Authority was not powerless to grant opportunity to the petitioner to deposit tax, interest coupled with penalty and late fee and relegate him to approach the Registering Authority under Section 30 of the CGST Act by condoning the delay as has been done by this Court in very many cases, namely in the case of Nirmani Engineers and Constructions Pvt. Ltd. Vrs. The Commissioner of CT&GST, Odisha and Others, W.P.(C) No.15934 of 2021, wherein vide Order dated 05.05.2021, this Court has observed as follows:
“2. Mr. Sunil Mishra, learned Additional Standing Counsel for Opposite Parties appearing on an advance notice states that as long as delay in filing the appeal is condoned, and provided the Petitioner complies with all the requirements of paying the taxes due, the 3B Return Form filed by the Petitioner will be accepted by the Opposite Parties.
3. In that view of the matter, the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes due and complying with other formalities, the GST return filed by the Petitioner, provided it is filed on or before 5th July, 2021, will be accepted by the Opposite Parties.”
2.7. It is stated by the petitioner that in exercise of power under Section 128 of the CGST Act, the amount of late fee payable by registered person for failure to furnish return in Form GSTR-3B for the month of July, 2017 onwards by the due date under Section 47 has been waived by virtue of Notification No.76/2018— Central Tax, dated 31.12.2018 issued by the Government of India in Ministry of Finance (Department of Revenue), whereby ninth proviso has been inserted by way of amendment vide Notification No.19/2021— Central Tax, dated 01.06.2021, which is to the following effect:
“Provided also that for the registered persons who failed to furnish the return in Form GSTR-3B for the months /quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1st day of June, 2021 to the 31st day of August, 2021, the total amount of late fee under Section 47 of the said Act, shall stand waived which is in hundred rupees:”
2.8. Relying on said proviso, it is, therefore, asserted that had the registration been live, the petitioner would have the occasion to furnish returns between the period from 01.06.2021 to 31.08.2021 in Form GSTR-3B for the__ months/quarter of July, 2017 to April, 2021.
2.9. Under such premise, the counsel for the petitioner praying for setting aside the Appellate Order (Annexure-1), would submit that given a chance, besides payment of tax, interest and penalty with late fee, all required returns can be furnished. Upon such compliance, the petitioner can be directed to make application under Section 30 for revocation of cancellation of registration.
3. It is stated at the Bar that many cases of this nature has been rejected by the Appellate Authority by passing a common order, as a consequence of which taxpayers even though are ready to deposit tax, interest and penalty with late fee and also furnish return(s), they are deprived of availing such advantage as is bestowed in the aforementioned notifications. Since the Bar sought to address the issue, this Court asked Sri Rudra Prasad Kar, Advocate to render assistance in this regard.
3.1. Mr. Rudra Prasad Kar, learned Advocate has placed the following suggestions by way of short note dated 25.08.2022:
“GST law being, a New Act, assessees are facing the difficulties in switching to procedural compliance electronically through internet on the GST Web-Portal. Considering the hardship faced by the assessees and more specifically due pandemic, various amnesty schemes were introduced by the Government of India to ease the technical and procedural complicacies faced by the assessees. The provisions of the GST enactments and the rules made thereunder, read with various clarifications issued by the Central Government, pursuant to the decision of the GST Council and the Notification issued thereunder, also makes it clear that the intention is only to facilitate business and not to debar the assessees from coming back into GST fold. The purpose of GST registration is only to ensure that just taxes get collected on supplies of goods or services or both and is paid to the exchequer. Keeping these petitioners outside the bounds of the GST regime is a self-defeating move. It will be in the interest of the State to allow restoration of the Registration Certificate and facilitate business to grow.
The provisions of the GST enactments cannot be interpreted so as to deny the right to carry on Trade and Commerce to a citizen. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of the defect in the scheme of the GST enactments. The right to carry on trade or profession also cannot be curtailed. Only reasonable restrictions, can be imposed.
To deny such rights would militate against the rights under Article 14, read with Article 19(1)(g) and Article 21 of the Constitution of India.
Recognizing the difficulties, the Central Board of Indirect Taxes and Customs (CBIC) extended the time limit for filing application for revocation of cancellation of registration for all the orders passed on or before 12.06.2020 was granted time till 31.08.2020 from which date the period of limitation for revocation of registration certificate would be counted. As the application filed by the writ-applicants for revocation of cancellation of registration was looked into by a quasi judicial authority, the order of the Hon’ble Supreme Court extending the period of limitation in view of the COVID-19 pandemic would apply and in such circumstances, the limitation in accordance with the order passed by the Central Board of Indirect Taxes and Customs would also stand extended.
In view of the above and the various amnesty scheme notified by the Department, the Court may consider passing an order in consonance with the order of Hon’ble Supreme Court in Union of India & Another Vrs. FILCO Trade Centre Pvt. Ltd. & Another, SLP(C) No.31709-32710/2018, dated 22.07.2022.
The following are the humble suggestions:
1. The Hon’ble Court may consider allowing ‘three’ months time to assessees/the registered persons, whose registration have been cancelled under clause (b) or clause (c) of sub-section (2) of Section_______ 29 of the GST Act to apply for revocation of cancellation of registration from the date of passing of the order.
2. Accordingly, the GST Authorities/Concerned Officers may be directed to consider the application of revocation and allow the assessees to comply with the statutory requirements namely filing of returns, deposit of tax, interest, penalty and late fee within a further period of one month.
3. Authorities to take a pragmatic view and restore the R.Cs.
It is submitted that the Government will not be put to any pecuniary loss/revenue loss, rather the above suggestions and directions of this Hon’ble Court will be in the larger interest of trade, commerce and economic growth of the nation.”
4. Mr. Rudra Prasad Kar, learned Advocate, brought attention of this Court to the Judgment of Hon’ble Madras High Court rendered in the case of Tvl. Suguna Cutpiece Center Vrs. The Appellate Authority and Another, W.P.(C) No.25048 of 2021, etc. etc., vide Order dated 31.01.2022 reported at 2022 (61) GSTL 515 (Mad) to demonstrate that in the said Judgment a batch of matters qua certain taxpayers, having failed to furnish returns, registration certificates had been cancelled in the years 2018 and 2019 in terms of Section 29(2)(c), and their appeals have also been rejected by the Appellate Authority on the ground of limitation; nonetheless, the said Court protected them by issue of writ of mandamus with certain conditions. He also referred to decisions of other High Courts where similar views have been expressed and the statute under consideration being a Central statute, the views so expressed can be taken cognizance of for the purpose of extending akin privilege to the similarly circumstanced taxpayers of this State. In furtherance thereof, he urged that many taxpayers of this State being in unison to deposit tax, interest and penalty with late fee as is required under the CGST Act and rules framed thereunder, and non-grant of such opportunity cannot be said to enure to the larger interest of the State exchequer and disposing of writ petition with a direction to the Registering Authority to restore the registration by setting aside the Appellate Order would not only meet interest of justice, but also it would not cause prejudice to the Revenue. Therefore, he requested for extending one-time benefit.
5. Copy of suggestions with short note was served on Mr. Subash Chandra Mohanty, learned Standing Counsel for the opposite parties, who on instruction, submitted that in the event the petitioner deposits the required tax, interest, penalty and late fee, and furnishes all the returns, subject to verification by the authority concerned, the revocation of registration, upon duly constituted application under Section 30 of the CGST Act, could be considered by the Registering Authority.
6. The CGST Act, 2017 was promulgated and brought into force with effect from 01.07.2017, which is an Act to make provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government and the matters connected therewith or incidental thereto. Likewise, the Odisha Goods and Services Tax Act, 2017 (for brevity, “OGST Act”) was enacted to make provision for levy and collection of tax on intra-State supply of goods or services or both by the State of Odisha and the matters connected therewith or incidental thereto. Thus, the resultant effect upon introduction of the CGST Act and the OGST Act is that certain other statutes including Odisha Value Added Tax Act, 2004 and the Odisha Entry Tax Act, 1999 which were imposing indirect taxes stood repealed and in their place indirect taxes are levied under the CGST Act and the OGST Act. The levy of tax on goods and services is being made by the Central Government under the provisions of the CGST Act, 2017 and concurrent power has been conferred on the State Government to levy goods and services tax under the provisions under the OGST Act. Relevant provisions involved for facilitating adjudication of the issue raised in the present case do require to be mentioned.
Section 29
“Cancellation or suspension of registration.—
(1) ***
(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,—
(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or
(b) a person paying tax under Section 10 has not furnished returns for three consecutive tax periods; or
(c) any registered person, other than a person specified in Clause (b), has not furnished continuous period of six months; or
(d) any person who has taken voluntary registration under sub-section (3) of Section 25 has not commenced business within six months from the date of registration; or
(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:
Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.
Provided further that during pendency of the proceedings relating to cancellation of such period and in such manner as may be prescribed.”
Section 30
“Revocation of cancellation of registration.—
(1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.
Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,—
(a) by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days;
(b) by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).
(2) The proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application:
Provided that the application for revocation of cancellation of registration shall not be rejected unless the applicant has been given an opportunity of being heard.
(3) The revocation of cancellation of registration under the Central Goods and Services Tax Act shall be deemed to be a revocation of cancellation of registration under this Act.”
Rule 22
“Cancellation of registration.—
(1) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29, he shall issue a notice to such person in Form GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled.
(2) The reply to the show cause notice issued under sub-rule (1) shall be furnished in Form REG-18 within the period specified in the said sub-rule.
(3) Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in Form GST REG-19, within a period of thirty days from the date of application submitted under Rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1), cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of Section 29.
(4) Where the reply furnished under sub-rule (2) is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in Form GST REG-20:
Provided that where the person instead of replying to the notice served under sub-rule (1) for contravention of the provisions contained in clause (b) or clause (c) of subsection (2) of Section 29, furnishes all the pending returns and makes full 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.
(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.”
Rule 23
“Revocation of cancellation of registration.—
(1) A registered person, whose registration is cancelled by the proper officer on his own motion, may submit an application for revocation of cancellation of registration, in Form GST REG-21, to such proper officer, within a period of thirty days from the date of the service of the order of cancellation of registration at the common portal, either directly or through a Facilitation Centre notified by the Commissioner:
Provided that no application for revocation shall be filed, if the registration has been cancelled for the failure of the registered person to furnish returns, unless such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.
Provided further that all returns due for the period from the date of the order of cancellation of registration till the date of the order of revocation of cancellation of registration shall be furnished by the said person within a period of thirty days from the date of order of revocation of cancellation of registration:
Provided also that where the registration has been cancelled with retrospective effect, the registered person shall furnish all returns relating to period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration within a period of thirty days from the date of order of revocation of cancellation of registration.]
(2) (a) Where the proper officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation of registration by an order in Form GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.
(b) 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.
(4) 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.”
7. The Hon’ble Gujarat High Court in the case of Aggarwal Dyeing and Printing Works Vrs. State of Gujarat & 2 Other(s), R/Special Civil Application No. 18860 of 2021, vide Judgment dated 24.02.2022 discussed the provisions enshrined for registration with reference to the rules framed thereunder in the following manner:
“8.1 Scheme of the Act:
*** The related provisions for certificate of registration and its cancellation, under the said Act are as under:
i. Section 2(107) defines the term “taxable person” means a person who is registered or liable to be registered under Section 22 or Section 24.
ii. Chapter VI pertains to Registration. Section 22 provides for person liable for registration. Section 23 pertains to person who shall not be liable for registration whereas Section 24 provides for compulsory registration in certain cases specified therein. Section 25 provides application to be made within period of thirty days and prescribes procedure to be followed for registration. Section 26 provides deemed registration.
iii. The Gujarat Goods and service Rules, 2017 has come into effect from 22nd June, 2017. Chapter III deals with subject “Registration”. Rule 8 provides for Application for registration. Rule 10 provides for Issue of registration certificate. Rule 16 provides for suo motu registration.
iv. Section 29 confers power upon the proper officer for cancellation of Registration. Section 30 provides for revocation of cancellation of registration. Against the aforesaid substantive provisions prescribed under the Act, the corresponding rules framed thereunder are also required to be looked into.
v. Rule 20 provides for filing of application for cancellation of registration by the dealer. Rule 21 provides for Registration to be cancelled by the proper officer in certain cases. Rule 22 deals for procedure to be adhered to while proceeding for with cancellation of registration. Rule 23 deals with Revocation of cancellation of registration.
9. In light of the aforesaid provisions, we notice that registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting tax on behalf of the Government and to avail input tax credit for the taxes on his inward supplies. Without registration, a person can neither collect tax from his customers nor claim any input tax credit of tax paid by him. It appears that registration in GST is PAN based and State specific. Thus, supplier has to get himself registered in each of such State or Union Territory from where he effects supply. The Act empowers proper officer and registration granted under GST can be cancelled for specified reasons. The cancellation can either be initiated by the department on their own motion or the registered person can apply for cancellation of his registration.
9.1 From the bare reading of the Rules, 2017 along with statutory provision, the reasons for cancellation can be culled out as under:
a) a person registered under any of the existing laws, but who is not liable to be registered under the GST Act;
b) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of;
c) there is any change in the constitution of the business;
d) the taxable person (other than the person who has voluntarily taken registration under sub-section (3) of Section 25 of the CGST Act, 2017) is no longer liable to be registered;
e) a registered person has contravened such provisions of the Act or the rules made thereunder;
f) a person paying tax under composition levy has not furnished returns for three consecutive tax periods;
g) any registered person, other than a person paying tax under composition levy has not furnished returns for a continuous period of six months;
h) any person who has taken voluntary registration under sub-section (3) of Section 25 has not commenced business within six months from the date of registration;_____
i) registration has been obtained by means of fraud, willful misstatement or suppression of facts.
9.2 The procedure for cancellation of registration can be summarized as under:
i. A person already registered under any of the existing laws (Central excise, Service tax, VAT etc.), but who now is not liable to be registered under the GST Act has to submit an application electronically by 31st December 2017, in Form GST REG-29 at the common portal for the cancellation of registration granted to him. The Superintendent of Central Tax shall, after conducting such enquiry as deemed fit, cancel the said registration.
ii. 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 Central Goods and Services Tax Act.
iii. In the event, the Superintendent of Central Tax has reasons to believe that the registration of a person is liable to be cancelled, a notice to such person in Form GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled; will be issued.
iv. The reply to the show cause notice issued has to be furnished by the registered person in Form REG-18 within a period of seven working days. iv. In case the reply to the show cause notice is found to be satisfactory, the Superintendent of Central Tax will drop the proceedings and pass an order in Form GST REG-20.
v. However, when the person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the Superintendent of Central Tax will issue an order in Form GST REG-19, within a period of thirty days from the date of application or, as the case may be, the date of the reply to the show cause issued, cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty.
vi. The 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 semi-finished 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.
vii. In case of capital goods or plant and machinery, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery, reduced by such percentage as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under Section 15, whichever is higher.
viii. The cancellation of registration shall not affect the liability of the person to pay tax and other dues 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.
9.3 At the same time, the statute also provides for revocation of cancellation:
i. When the registration has been cancelled by the Proper Officer (Superintendent of Central Tax) on his own motion and not on the basis of an application, then the registered person, whose registration has been cancelled, can submit an application for revocation of cancellation of registration, in Form GST REG-21, to the Proper Officer (Assistant or Deputy Commissioners of Central Tax), within a period of thirty days from the date of the service of the order of cancellation of registration at the common portal, either directly or through a Facilitation Centre notified by the Commissioner:
ii. However, if the registration has been cancelled for failure to furnish returns, application for revocation shall be filed, only after such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.
iii. On examination of the application if the Proper Officer (Assistant or Deputy Commissioners of Central Tax) is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, then he shall revoke the cancellation of registration by an order in Form GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.
iv. However, if on examination of the application for revocation, if the Proper Officer (Assistant or Deputy Commissioners of Central Tax) is not satisfied then he will issue a notice in Form GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation should not be rejected and the applicant has to furnish the reply within a period of seven working days from the date of the service of the notice in Form GST REG-24.
v. Upon receipt of the information or clarification in Form GST REG-24, the Proper Officer (Assistant or Deputy Commissioners of Central Tax) shall dispose of the application within a period of thirty days from the date of the receipt of such information or clarification from the applicant. In case the information or clarification provided is satisfactory, the Proper Officer (Assistant or Deputy Commissioners of Central Tax) shall dispose the application as per para (iii) above. In case it is not satisfactory the applicant will be mandatorily given an opportunity of being heard, after which the Proper Officer (Assistant or Deputy Commissioners of Central Tax) after recording the reasons in writing may by an order in Form GST REG-05, reject the application for revocation of cancellation of registration and communicate the same to the applicant.
vi. The revocation of 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 revocation of cancellation of registration under Central Goods and Services Tax Act.
10. Thus, upon appreciation of the scheme of Act, where specific forms have been prescribed at each stage right from registration, cancellation and revocation of cancellation of registration, the same are to be strictly adhered to. At the same time, it is equally important that the proper officer empowered under the said Act adheres to the principles of natural justice.
11. At the outset, we notice that it is settled legal position of law that reasons are heart and soul of the order and non-communication of same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. ***”
7.1. A conjoint reading of the provisions referred to above juxtaposed with provisions contained in Section 39 read with Rule 61 would clearly indicate that the petitioner is bound to file return for the month concerned on or before the 20th of the succeeding month concerned. Further a reading of Section 29(2)(c) of the CGST Act would also disclose that it is mandated by the Legislature that if there is continuous default of six months on the part of the assessee in filing returns, then the competent authority can invoke the power conferred under Section 29(2)(c) of the said Act to cancel the registration.
7.2. In the instant case, it is transpired from pleading in the writ petition that though the Superintendent, Berhampur-I Range passed order cancelling the registration with effect from 15.10.2019, the petitioner has been allowed to deposit an amount of Rs.3,09,360/- with late fee of Rs.5,000/- in respect of the tax liability for the period October, 2019 and the return in connection with cancelled GSTIN being 21ALPPP8146E2ZY was allowed to be furnished on 22.04.2021.
8. It appears, being confused on account of newly introduced taxation procedure, instead of taking recourse to the remedy available under Section 30 read with Rule 23 for revocation of cancellation of registration, appeal under Section 107 was preferred by the petitioner.
8.1. In the order of cancellation of registration dated 15.10.2019 (Annexure-4) it has been reflected as follows:
“This has reference to your reply dated 31.08.2019 in response to the notice to show cause dated 21.08.2019.”
However, without assigning any reason for considering said response, the proper officer, Superintendent, has cancelled the registration.
8.2. The appeal preferred by the petitioner has been rejected with the following observation:
“8. I find that the said appellant Nos.1 to 32 did not file the requisite returns as indicated in the respective show cause notice issued to them. Therefore, their registrations were cancelled. They also did not file application for revocation of cancellation of registration within the prescribed time. It is also noticed that the said appellants have not filed the present appeals within the stipulated time limit prescribed under Section 107(1) of CGST Act, 2017.
9. As per the provisions of Section 107(1) of the CGST Act, a person is required to file appeal against an order passed by an adjudicating authority within the time limit of three months from the date on which order is communicated. It is noted that Hon’ble Supreme Court in its order dated 8th March, 2021 has extended the limitation period prescribed under general law of limitation or under any special (both Central and State) due to the onset of Covid-19 virus. Hon’ble Supreme Court in the said order has directed that in computing the period of limitation for any appeal, the period from 15.03.2020 to 14.03.0021 shall stand excluded. Further, it has been held in the said order that in cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have limitation period of 90 days from 15.3.2021.
10.1 It is also noted that the Hon’ble Supreme Court in its order dated 27.04.2021 has restored its earlier order dated 08.03.20 21 in view of the extraordinary situation caused by the second outburst of COVID-19 virus. Hon’ble Supreme Court has ruled that in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as described under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not shall stand extended till further orders. Hon’ble Supreme Court has further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the limitation period.
10.2 In pursuance of the orders of the Hon’ble Supreme Court, Central Board of Indirect Taxes and Customs (CBIC) has issued a circular No. 157/13/2021-GST dated 20.07.2021. In the said circular, it is clarified that period of limitation extended by Supreme Court in its order dated 27.04.2021 shall be applicable in respect of any appeal before the appellate authority under the CGST Act. The relevant portion of the said Circular is reproduced as under:
“5. In other words, the extension of timelines granted by the Hon’ble Supreme Court vide its order dated 27.04.2021 is applicable in respect of any appeal which is required to be filed before Joint/Additional Commissioner (Appeals), Commissioner (appeals), appellate authority for advance rulings, tribunal and various courts against any quasi-judicial order or where proceeding for revision or rectification of any order is required to be undertaken, and is not applicable to any other proceedings under GST laws.”
11. Thus, taking into account the extension of limitation period granted by the CBIC and Hon’ble Supreme Court, I find that the appeals by the above Appellant Nos. 1 to 32 are filed beyond the prescribed period of limitation. Therefore, I am constrained to reject the said appeals filed by the Appellant No. 1 to 32. Held accordingly.”
8.3. It is apparent from the above that while rejecting appeals of 32 taxpayers on 07.10.2021 by a common order, the Appellate Authority had no occasion to notice the further order being passed on 10.01.2022 by the Hon’ble Supreme Court taking into consideration third surge of COVID-19 virus. Said order dated 10.01.2022 having bearing on the case at hand, the appellate order deserves to be set aside.
8.4. Significant it is to have reference to Notification No.76/2018— Central Tax [GSR 1253(E)], dated 31st December, 2018 issued in exercise of power conferred under Section 128 along with pertinent amendments made thereof subsequently. For better appreciation relevant portions of said notification are extracted herein below to appreciate that the Government extended the benefit to taxpayers to furnish the returns between the period from 1st day of July, 2020 to 30th of September, 2020 who failed to furnish returns for the months of July, 2017 to January, 2020 by the due date:
“Government of India Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
Notification No. 76/2018 – Central Tax
New Delhi, the 31st December, 2018
G.S.R.1253 (E),– In exercise of the powers conferred by section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Central Government, on the recommendations of the Council , and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 28/2017 – Central Tax, dated the 1st September, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1126 (E), dated the 1st September, 2017, notification of the Government of India in the Ministry of Finance, Department of Revenue No. 50/2017 – Central Tax, dated the 24th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1326 (E), dated the 24th October, 2017 and notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 64/2017– Central Tax, dated the 15th November, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.1420(E), dated the 15th November, 2017, except as respects things done or omitted to be done before such supersession, hereby waives the amount of late fee payable by any registered person for failure to furnish the return in FORM GSTR-3B for the month of July, 2017 onwards by the due date under section 47 of the said Act, which is in excess of an amount of twenty-five rupees for every day during which such failure continues:
Provided that where the total amount of central tax payable in the said return is nil, the amount of late fee payable by such registered person for failure to furnish the said return for the month of July, 2017 onwards by the due date under Section 47 of the said Act shall stand waived to the extent which is in excess of an amount of ten rupees for every day during which such failure continues:
Provided further that the amount of late fee payable under Section 47 of the said Act shall stand waived for the registered persons who failed to furnish the return in Form GSTR-3B for the months of July, 2017 to September, 2018 by the due date but furnishes the said return between the period from 22nd December, 2018 to 31st March, 2019.
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1[Provided also that the total amount of late fee payable for a tax period, under Section 47 of the said Act shall stand waived which is in excess of an amount of two hundred and fifty rupees for the registered person who failed to furnish the return in Form GSTR-3B for the months of July, 2017 to January, 2020, by the due date but furnishes the said return between the period from 1st day of July, 2020 to 30th day of September, 2020:
Provided also that where the total amount of Central tax payable in the said return is NIL, the total amount of late fee payable for a tax period, under Section 47 of the said Act shall stand waived for the registered person who failed to furnish the return in Form GSTR-3B for the months of July, 2017 to January, 2020, by the due date but furnishes the said return between the period from 1st day of July, 2020 to 30th day of September, 2020.]
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2[Provided also that for the registered persons who failed to furnish the return in Form GSTR-3B for the months/quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1st day of June, 2021 to the 31st day of August, 2021, the total amount of late fee under Section 47 of the said Act, shall stand waived which is in excess of five hundred rupees:
Provided also that where the total amount of central tax payable in the said return is nil, the total amount of late fee under Section 47 of the said Act shall stand waived which is in excess of two hundred and fifty rupees for the registered persons who failed to furnish the return in Form GSTR-3B for the months/quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1st day of June, 2021 to the 31st day of August, 2021:
Provided also that the total amount of late fee payable under Section 47 of the said Act for the tax period June, 2021 onwards or quarter ending June, 2021 onwards, as the case may be, shall stand waived which is in excess of an amount as specified in column (3) of the Table given below, for the class of registered persons mentioned in the corresponding entry in column (2) of the said Table, who fail to furnish the returns in Form GSTR-3B by the due date, namely: —
