Introduction: The Madras High Court Recently disposed the Writ Petition No W.P.No.25148 of 2023 in the mater of GST Registration.
Grounds for Petition: The petitioner filed the application seeking GST New Registration, due to my ill health condition I could not able to file my GST returns on time. Hence the Respondent issued show cause notice vide reference number: AA3301220272240 dated 11-01-2022 for non-filing of monthly statutory returns. the Respondent cancelled my GSTIN: 33BMKPS8581D1ZO on 25-01-2022 due to noncompliance for the above mentioned show cause notice vide reference number: AA3301220272240 dated 11-01-2022. I further state that I am physically challenged person I was infected, severely affected and suffered by COVID-19 adding to that spine surgery. Hence, unable to reply the show cause notice and the Respondent cancelled GSTIN: 33BMKPS8581D1ZO after filing of all the pending returns the petitioner Applied for New GSTIN vide application Form GST Reg – 01 on 24-04-2023. I obtained Temporary reference number (TRN): 332300091245TRN and the same day I received acknowledgement Form GST Reg – 02 vide application reference number (ARN): AA330423071513L dated on 24-04-2023. aforesaid application the Respondent sent show cause notice reference number:ZA330523029327R dated:08-05-2023 seeking additional information/ Clarification/Documents relating to “1 Principal Place of Business – Document Upload – Others (Please specify) – Cancellation of GSTIN – 33BMKPS8581D1ZO apply for revocation” with the deadline dated 17-05-2023 to comply. The Petitioner submitted response before due date for aforesaid show cause notice with detailed reply along with proof of documents. Further, the Respondent rejected my GSTIN Registration application reference number (ARN): AA330423071513L on 17-05-2023 stating that I already have a GSTIN:33BMKPS8581D1ZO which was cancelled and same can be revoked in under the Amnesty Scheme.
Court’s View: This aspect was also considered by this Court in M/s. Suguna Cutpiece Center Vs. Appellate Deputy Commissioner (ST) (GST) and another, 2022 (2) TMI 933. Court is inclined to dispose this writ petition by directing the respondent to permit the petitioner to carry on the business either by allowing the petitioner to avail the benefit of Notification No.3/2023-Central Tax dated 31.03.2023 as extended by Notification No.23/2023-Central Tax dated 17.07.2023 or in the alternative, accept the application filed for fresh registration. Subject to such compliance, the cancelled GSTIN registration of the petitioner under the CGST Act/TNGST Act, 2017 shall be either revoked or a fresh GST registration shall be issued to the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mrs. K. Vasanthamala, learned Government Advocate takes notice on behalf of the respondent.
2. Heard the learned counsel for the petitioner and the learned Government Advocate for the respondent.
3. The petitioner has challenged the impugned order bearing Ref.No.ZA330523075212Y dated 17.05.2023 issued under Form GST REG-05 under Rule 9(4) of the Tamil Nadu Goods and Service Tax (TNGST) Rules, 2017 rejecting the application filed by the petitioner for fresh registration under the respective GST enactments to carry on business.
4. The petitioner appears to be a person with certain disability, who had failed to file returns in time and therefore, the petitioner’s registration was cancelled on 25.01.2022.
5. The petitioner had an option to file an appeal against the aforesaid order cancelling the registration before the Appellate Commissioner under Section 107 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017 or to file an application for revocation of the cancellation of registration under Section 30 of the respective GST enactments. Either way, these appeals or the applications were to be filed within the time line stipulated in the respective provisions. The petitioner failed to exercise the same.
6. The records indicate that the petitioner had filed the returns for the entire period on 24.04.2023 in GSTR-10. It appears that the petitioner has also filed a fresh application for registration on the same day, which has now been rejected by an order dated 17.05.2023.
7. The records further indicates that a Show Cause Notice under Section 63 read with Section 50(3) and Section 122(1)(x) and Rule 100(2) of the GST Rules under Form GST-ASMT-14 has been issued to the petitioner on 25.07.2023.
8. In the said notice, the respondent has sought to levy tax on the closing stock, which appears to have not been declared as the closing stock appears to have been cleared without payment of tax.
9. It is noticed that the petitioner was also called for personal hearing on 11.08.2023 at 11.30 a.m. The petitioner has also not participated in the proceedings.
10. Although the learned counsel for the petitioner would submit that the petitioner appeared for personal hearing, the contention of the Department is that all through the period beginning from 2017, the petitioner has debited the tax liability only from the Input Tax Credit availed on the supplies made to the petitioner and that only a sum of Rs.59,448/- has been paid in cash during the period in dispute.
11. Be that as it may, the denial of fresh registration to the petitioner cannot be justified particularly considering the fact that the petitioner will get into business one way or the other for his livelihood.
12. By declining registration, the Department is going to be the looser. There will be a leakage of revenue as the petitioner will still continue to do business without registration. Therefore, the registration should be denied to the petitioner.
13. This aspect was also considered by this Court in M/s. Suguna Cutpiece Center Appellate Deputy Commissioner (ST) (GST) and another, 2022 (2) TMI 933.
14. Under these circumstances, Court is inclined to dispose this writ petition by directing the respondent to permit the petitioner to carry on the business either by allowing the petitioner to avail the benefit of Notification No.3/2023-Central Tax dated 31.03.2023 as extended by Notification No.23/2023-Central Tax dated 17.07.2023 or in the alternative, accept the application filed for fresh registration.
15. This will be without prejudice to the rights of the respondent to complete the proceedings initiated under Section 63 read with Section 50(3) and Section 122(1)(x) and Rule 100(2) of the GST Rules under Form GST-ASMT-14 vide Show Cause Notice 25.07.2023 and initiate appropriate proceedings against the petitioner for recovery of tax if any for the past. The proceedings initiated under Section 63 of the respective GST enactments on 25.07.2023 against the petitioner shall be completed as expeditiously as possible.
16. Considering the fact that the petitioner has discharged major part of the tax liability by debiting his Electronic Credit Ledger for the supplies effected by the petitioner during the period in dispute, the petitioner shall deposit a sum of Rs.1,50,000/- in cash within a period of thirty days from the date of receipt of a copy of this order without prejudice to the rights of the petitioner in the proceedings that is to be completed pursuant to the notice dated 25.07.2023 in Form GST ASMT-14 issued under Section 63 of the TNGST Act, 2017.
17. Subject to such compliance, the cancelled GSTIN registration of the petitioner under the CGST Act/TNGST Act, 2017 shall be either revoked or a fresh GST registration shall be issued to the petitioner.
18. This Writ Petition is disposed of with the above observations. No costs. Consequently, connected Writ Miscellaneous Petition is closed.