Extension of time limit to apply for Revocation of cancellation of registration & Conditions Relaxed – A welcome facility for Taxpayers.

The CGST Act under Section 29 provides for Cancellation of Registration under specified circumstances while at the same time Section 30 also provides a facility for Revocation of Cancellation of Registration in case the Registration is cancelled suo-motto by the Tax Officer.   Generally, the time limit for Application for Revocation of Cancellation of Registration is 30 days from the date of service of the Order for Cancellation of Registration.  However, the provisions of Section 30 of the CGST Act 2017 read with Rule 23 of CGST Rules 2017 were amended and new provision for extension of time limit by 30 days (Original 30 days + another 30 days i.e. 60 days) with the approval of Additional Commissioner / Joint Commissioner and further 30 days (i.e., up to 90 days) with the approval by the Commissioner was inserted by The Finance Act, 2020 (No. 12 of 2020).  These changes were brought into force w.e.f. 01^st January 2021.

2. In this regard, one has to also recollect that Notification No.14/2021-Central Tax, dated 1^st May 2021, as amended, had, inter-alia, as a one-time relaxation extended the date for filing of an application for revocation of cancellation of registration till 30^th June, 2021, where the due date of filing of the application was falling between 15th April, 2021 to 29th June, 2021. Subsequently, the Government issued one more Notification No. 34/2021-Central Tax dated 29th August, 2021 to extend the timelines for filing of the application for revocation of cancellation of registration to 30th September, 2021, where the due date of filing of the application for revocation of cancellation of registration falls between 1^st March, 2020 to 31^st  August, 2021.  This extension is applicable for those cases where registrations have been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of the said Act which means that these relaxations will be applicable only if

• a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or
• any registered person, other than a Composition Optee has not furnished returns for a continuous period of six months;

3. The Application for Revocation of Cancellation of Registration shall be filed under prescribed Form GST REG-21. The Government had also issued a detailed Circular No. 148/04/2021-GST, dated 18th May, 2021, elaborating the guidelines and Standard Operating Procedure (SOP) for implementation of the provision for extension of time limit to apply for revocation of cancellation of registration under section 30 of the Central Goods and Services Tax Act, 2017 and rule 23 of the Central Goods and Services Tax Rules, 2017, till the time an independent functionality for extension of time limit for applying in FORM GST REG-21 is developed on the GSTN portal.

4. It has been provided there that where a person applies for revocation of cancellation of registration beyond a period of 30 days from the date of service of the order of cancellation of registration but within 60 days of such date, the said person may request, through letter or e-mail, for extension of time limit to apply for revocation of cancellation of registration to the proper officer by providing the grounds on which such extension is sought. The proper officer in this case the jurisdictional Deputy Commissioner / Assistant Commissioner shall forward the request to the jurisdictional Joint/Additional Commissioner for a decision on the request for extension of time limit.

5. The Joint/Additional Commissioner, on examination of the request filed for an extension of time limit for revocation of cancellation of registration and on sufficient cause being shown and for reasons to be recorded in writing, may extend the time limit to apply for revocation of cancellation of registration. In case the request is accepted, the extension of the time limit shall be communicated to the proper officer, the jurisdictional Deputy Commissioner / Assistant Commissioner.

6. However, in case the concerned Joint/Additional Commissioner is not satisfied with the grounds on which such extension is sought, an opportunity of personal hearing may be granted to the person before taking a decision in the matter. In case of rejection of the request for the extension of time limit, the grounds for such rejection may be communicated to the person concerned, through the proper officer. On receipt of the decision of the Joint/Additional Commissioner on request for extension of time limit for applying for revocation of cancellation of registration, the proper officer (DC/AC) shall process the application for revocation of cancellation of registration according to the procedure laid down under the concerned Section and Rules of the GST Law in this regard.

7. A procedure similar to that explained in paragraph supra shall be followed mutatis-mutandis in case a person applies for revocation of cancellation of registration beyond a period of 60 days from the date of service of the order of cancellation of registration but within 90 days of such date where the power to condone the delay lies with the jurisdictional Commissioner.

8. It may also not be out of place to note that Notification No.14/2021-Central Tax, dated 1^st  May, 2021, as amended, had inter-alia, extended the date of filing of an application for revocation of cancellation of registration till 30th June, 2021, where the due date of filing of the application was falling between 15th April, 2021 to 29th June, 2021.  Consequent to the receipt of a number of representations and request to relax this beneficial provision from the trade and stakeholders, during the pandemic times,  the Government considered the matter sympathetically and had issued Notification No. 34/2021-Central Tax dated 29th August, 2021 to extend the timelines for filing of an application for revocation of cancellation of registration to 30^th September, 2021, where the due date of filing of the application for revocation of cancellation of registration falls between 1st March, 2020 to 31 st August, 2021. Again, this extension is also applicable only for those cases where registrations have been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of the said Act (i.e., non-filers/stop filers of returns by Registered persons) as already stated above.

9. The CBIC, GST Policy wing has now issued detailed clarifications regarding the status of the applications covered under the scope of the said notifications and how to deal with them in order to ensure uniformity in the implementation of the said notification across field formations. The said notification specifies that where the due date of filing of an application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021, the time limit for filing of the application for revocation of cancellation of registration is extended to 30th September, 2021.  Accordingly, the benefit of the said notification is extended to all the cases where cancellation of registration has been done under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Act, 2017 (i.e., non-filers/stop filers of returns by Registered persons) and where the due date of filing of an application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021.

10. Further, the benefit of notification would be applicable in those cases also where

a) the application for revocation of cancellation of registration is either pending with the proper officer or has already been rejected by the proper officer;

b) cases which are pending with the appellate authority or which have been rejected by the appellate authority;

c) application for revocation of cancellation of registration has not been filed by the taxpayer;

d) application for revocation of cancellation of registration has already been filed and which are pending with the proper officer;

e) application for revocation of cancellation of registration was filed but was rejected by the proper officer and taxpayer has not filed any appeal against the rejection;

f) application for revocation of cancellation of registration was filed, the proper officer rejected the application and appeal against the rejection order is pending before appellate authority;

g) application for revocation of cancellation of registration was filed, the proper officer rejected the application and the appeal has been decided against the taxpayer;

11. In other words, the date for filing an application for revocation of cancellation of registration in all cases, where registration has been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of CGST Act, 2017 and where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021, is extended to 30th September, 2021, irrespective of the status of such applications. Further, in such cases, the taxpayer may file a fresh application for revocation and the officer shall process the application for revocation considering the extended timelines as provided vide the said notification.

12. It may be remembered that proviso to sub-section (1) of section 30 of the CGST Act 2017 has been inserted which provides for an extension of time for filing the application for revocation of cancellation of registration by 30 days by Additional/ Joint Commissioner and by another 30 days by the Commissioner only with effect from 01.01.2021. Therefore, there could be a question

(a) whether the said notification has extended the due date in respect of the initial period of 30 days for filing the application under sub-section (1) of section 30 of the CGST Act 2017

or

(b) whether the due date of filing applications for revocation of registration can be extended further for the period of 60 days (30 + 30) by the Joint Commissioner/ Additional Commissioner/ Commissioner, as the case may be, beyond the extended date of 30.09.2021.

13. To eliminate this doubt, it has been categorically clarified vide Circular No. 158/14/2021-GST, dated: 06-09-2021, that:

where the thirty days’ time limit falls between 1st March, 2020 to 31st December, 2020, as there was no provision available to extend the said time period of 30 days under section 30 of the CGST Act 2017 at the material time, in such cases, pursuant to the said notification, the time limit to apply for revocation of cancellation of registration stands extended up to 30th September 2021 only;

14. While in situations where the time period of thirty days since the cancellation of registration has not lapsed as on 1st January 2021 or where the registration has been cancelled on or after 1st January 2021, the following three scenarios emerge and the time limit for applying for revocation of cancellation of registration shall stand extended in the following way:

(a) Where the time period of 90 days (initial 30 days and extension of 30 + 30 days) since the cancellation of registration has elapsed by 31.08.2021, the time limit to apply for revocation of cancellation of registration stands extended up to 30^th September 2021, without any further extension of time by Joint Commissioner/ Additional Commissioner/ Commissioner.

(b) Where the time period of 60 days (and not 90 days) since the cancellation of registration has elapsed by 31.08.2021, the time limit to apply for revocation of cancellation of registration stands extended up to 30^th September 2021, with the extension of timelines by another 30 days beyond 30.09.2021 by the Commissioner, on being satisfied, as per proviso to sub-section (1) of section 30 of the CGST Act

(c) Where the time period of 30 days (and not 60 days or 90 days) since the cancellation of registration has elapsed by 31.08.2021, the time limit to apply for revocation of cancellation of registration stands extended up to 30^th September 2021, with the extension of timelines by another 30 days beyond 30.09.2021 by the Joint/Additional Commissioner and another 30 days by the Commissioner, on being satisfied, as per proviso to sub-section (1) of section 30 of the CGST Act.

15. This clarification as above has put to rest all the apprehensions that have been associated with the benefits of the amendments extended by the Government to facilitate trade and business, especially during pandemic times.  With the issue of the above clarifications and SOPs at the appropriate time, the prospective litigations on the subject matter will certainly be avoided and laid to rest being a proactive move.

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(The author is a recipient of the prestigious Presidential Award from Government of India for meritorious and specially distinguished service in 2019)