1. In view of the Global Pandemic Situation across the Country, the Supreme Court took Suo Motu cognizance of the situation arising out of the difficulties issued faced by the litigants in filing petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or any under the special law.
1.1 The Supreme Court issued various directions by way of an order dated March 8, 2021.
1.2 Paragraph 2 of the said order is relevant in respect of revocation of cancelled GST Registration
2. EXTRACTS OF PARAGRAPH 2 OF SUPREME COURT ORDER DATED 08 MARCH 2021: In the case where the limitation would have been expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of remaining, all the persons shall have a limitation period of 90 days from 15.03.2021.
3. ANALYSIS OF THE ORDER BY CHENNAI TAX DEPARTMENT: The Commercial Tax Department Chennai has highlighted the Supreme Court’s observation dated 08th March 2021, and issued instructions to all the territorial joint commissioners in respect of revocation of the cancellation of Registration under CGST Act, 2017.
3.1 PARA 6.6 OF THE INSTRUCTION BY CHENNAI TAX DEPARTMENT: The Chennai Tax department vide Para 6.6. of the instruction analyzed the order in the following manner: –
3.1.1 In computing any period of Limitation, for any suit, appeal, application, or proceedings, the period from March 15, 2020, till March 14, 2021, shall stand excluded. Consequently, the balance period of Limitation remaining as of March 15, 2020, if any shall become available with effect from March 15, 2021.
3.1.2 If the application for revocation has been filed in less than 30 days prior to 15.03.2020 or after 15.03.2020, the limitation period of 90 days would be available after 14.03.2021.
(a) Mr. X’s registration got cancelled on 1st March 2020 as a result of the non-filing of returns.
(b) he could apply for revocation till 31st March 2020 after furnishing all the returns.
(c) He had applied for revocation of cancelled registration on 28th March 2020.
(d) He will have the limitation period of 90 days from 15th March 2021 notwithstanding the actual balance remaining period.
(e) Thus, he can apply for revocation till 13 June 2021 (90 days = 16+30+31+13)
4. HIGHLIGHTS BY CHENNAI TAX DEPARTMENT: The analysis & highlights of the Supreme Court order by the Chennai tax department have been brought out in succeeding paragraphs.
4.1 Under Article 142 of the Indian Constitution, the above Supreme Court order shall be applicable for the Taxpayers under GST Act, 2017 also and therefore, a proper officer defined under this Act is bound to act in accordance with the directions issued in the above Supreme Court order.
4.2 The Proper officer, being a quasi-judicial authority and Deputy Commissioner, GST Appeals, Joint Commissioner, GST Appeals being judicial authorities are also bound by the order of the Supreme Court and hence, to revoke the cancellation of Registration issued under GST Act, 2017, following instructions are issued.
(a) The taxpayers, whose registration have been cancelled for non-filing of returns during the period from March 15, 2020, to March 14, 2021, when approached the proper officer for Revocation of Cancellation of Registration after the prescribed period of 30 days, the said application was rejected by the proper officer on the ground that the limitation period prescribed by the Act had already expired.
(b) Hence, all the taxpayers whose applications have been rejected by the proper officer for the above said reasons approached the DC, GST Appeals, and obtained an order of Revocation of cancellation.
5. Background why taxpayers approached GST Appeals for filing Revocation of Cancellation Order: There was a restriction on the GSTN portal for the reapplication of the revocation of the cancellation. The Goods and Services Tax Network (GSTN) on 20 July 2020 has issued an advisory on the interim measure for filing revocation of cancellation order in appeal channel.
As per the advisory, in case, the application for revocation of cancellation of registration was rejected by the tax authorities before 12/6/2020 and the taxpayer wishes to avail the benefit of Removal of Difficulty order 01/2020 dated 25.06.2020, he can request the appellate authority or the higher authority to pass a simple offline order on it for the restoration of the application as an interim measure. Based on such an order, the jurisdictional authority can restore the application for revocation of cancellation.
The taxpayer was required to apply post-login: -Registration- Restore Registration- Restore Revocation. He needs to enter the ARN of the order and would require to upload a scanned copy of the order passed after clicking “Appeal in favor”.
GSTIN Portal enabled the functionality to file Revocation Application under Removal of Difficulty dated 06.08.2020
6. INSTRUCTIONS ISSUED BY THE CHENNAI TAX DEPARTMENT: The Chennai tax department vides Para 6 of circular no. P/35/2021-ADC(RC&M)-CCT-CTD dated 07 April 2021 has issued detailed instructions for revocation of cancelled registration.
PARA 6 The Proper officer, being a quasi-judicial authority and Deputy Commissioner, GST Appeals, Joint Commissioner, GST Appeals being judicial authorities are also bound by the order of the Supreme Court and hence, to revoke the cancellation of Registration issued under GST Act, 2017, following instructions are issued.
|Para 6.1||If the registration certificate issued under GST is cancelled for the reasons referred in section 29(1) to 29(d), and any application for revocation of cancellation of registration received after 30 days from the date of cancellation, and if such period falls between 15.03.2020 till 14.03.2021, the balance period of limitation remaining as on 15-03-2020, if any shall become available with effect from 15-03-2021.|
|Para 6.2||The prescribed period of 30 days shall be calculated from the date of cancellation of registration by excluding the days falling during the period from 15.03.2020 to 14.03.2021.|
STATUTORY PROVISIONS – SECTION 29(1) TO 29(D): Reasons for cancellation under section 29(1) to 29(d)
A registered person can apply for revocation if the proper officer cancelled the registration (Suo Motu) due to the following reasons: –
(a) Contravened provisions of the Act or the rules made thereunder.
(b) Composition dealer has not furnished returns for three consecutive tax periods
(c) Any taxable person not furnished returns (other than composition) for a continuous period of six months.
(d) The voluntarily registered person has not commenced business within six months from the date of registration.
As per section 30(1) & Rule 23(1) of CGST Act/ Rule, any registered taxable person, whose registration is canceled by the proper officer on his motion, may apply to such officer for revocation of cancellation of the registration in the form GST REG-21 within thirty days from the date of service of the cancellation order.)
ANALYSIS: The registered person submits revocation application after 30 days and that period falls between 15.03.2020 and 14.03.2021. The balance period between with effect from 15.03.2020 will be available w.e.f 15.03.2021.
EXAMPLE Mr. X’s registration got cancelled on 1st March 2020 as a result of the non-filing of returns; he could apply for revocation till 31st March 2020 after furnishing all the returns. He had applied for revocation of cancelled registration on 15 April 2020 and his application got rejected as the 30-day time period was over on 31st March 2020.
The balance period of limitation remaining as of 15-03-2020 was 15 days and the same shall become available to him with effect from 15-03-2021. He could apply for revocation by 30th March 2021.
|Para 6.3||If the taxpayer applied for revocation of cancellation of registration and if the said date of filing application falls within 30 days after excluding the period from 15-03-2020 to 14-03-2021, the proper officer shall pass revocation order on merits subject to fulfillment of conditions stipulated in the Rules by considering the said application filed within 30 days|
|In the above example, if, Mr. X has filed his application on 28th March 2021, the proper officer shall pass revocation order on merits subject to fulfillment of conditions stipulated in the Rules by considering the said application filed within 30 days|
|Para 6.4||If an application for revocation of cancellation of Registration is already rejected on the ground of exceeding 30 days without considering the period from 15-03-2020 to 14-03-2021, the said taxpayers may be requested to apply again and orders passed on merits.|
|If the application files by Mr. X on 28th March 2021 on the ground of exceeding 30 days, Mr. X may be requested to apply again and the proper officer shall pass the order on Merit.|
|Para 6.5||If any appeals have been filed against the cancellation of Registration order by the TaxPayers, and if the said period falls beyond the period the prescribed period specified under section 107, then the Deputy Commissioner, GST Appeals, and Joint Commissioner, GST Appeals shall admit the application and pass order on merits specified under section 107 available with effect from 15.03.2020 to 14.03.2021|
|the prescribed period specified under section 107 Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person|
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