Jharkhand High Court Allows Application for Revocation of Cancelled GST Registration Despite Expiry of Limitation Period

In a recent ruling, the Jharkhand High Court has permitted the filing of an application for revocation of cancelled GST registration, despite the expiration of the limitation period.

The decision stemmed from a petition filed by a proprietor aggrieved by the dismissal of their petition under section 107 of the Central Goods and Services Tax Act, 2017 (GST Act). The petitioner sought to avail themselves of the option under section 30 of the GST Act for revocation of the cancellation of registration.

The petitioner approached the Court in the capacity of the proprietor of M/s Dresco Tailors with the aforementioned prayers. The petitioner pleaded that his proprietary Firm was duly registered under Goods and Services Tax Act, 2017 but the said registration was cancelled on the ground that the Firm had failed to furnish the returns for a continuous period of six months.

Against the order of cancellation, the petitioner filed an appeal under section 107 of the GST Act which was dismissed on the ground that the appeal was barred by limitation.

The counsel appearing for the petitioner referring to the Notification dated 31st March 2023 which was issued by the Directorate of Revenue, Ministry of Finance, Government of India by which the time for filing the application for the revocation of cancellation was extended till 30th June 2023, pleaded that on account of paucity of time he could not avail of the benefit under the Notification because the appeal filed by him against the order of the cancellation of registration was pending and in the meantime the last date for making the application for revocation of the cancellation of registration under the said Notification lapsed on 30th June 2023.

Alternatively, the counsel for the GST/Income Tax Department submitted that the period of limitation for filing an application under section 30 of the GST Act had already lapsed and, therefore, the Court may not grant any indulgence in the matter.

Notably, Section 39 of the GST Act provides that every registered person other than an input service distributor or a non-resident taxable person shall for every calendar month or part thereof furnish a return of inward and outward supply of goods and service.

Furthermore, there are other requirements/ stipulations under section 39 which every registered person/Firm is required to comply with. Section 45 provides a window to the registered person/Firm for restoration of the registration by allowing/furnishing a final return within three months from the date of the cancellation or from the date of the order of cancellation whichever is later. Under section 30, any registered person whose registration is cancelled may apply for revocation of cancellation of registration in the prescribed manner.

The division bench comprising Acting Chief Justice Shree Chandrashekhar and Justice Navneet Kumar observed, “The primary object behind the GST Act is levy and collection of tax on intra State supply of goods or services and the matters connected therewith or incidental thereto. Now the cancellation of registration shall ensue serious civil consequences for the petitioner and his entire business shall come to a standstill. The provisions under sections 30, 45, 46, 47 etc. are intended at providing opportunity to the defaulter Firm so as the Firm continues its business.”

“Therefore, a liberal approach is required to be taken in the matters like the present proceeding notwithstanding the period prescribed under section 30 of the GST Act having been lapsed. Having thus examined the materials on record, we are of the opinion that a permission to the petitioner to file an application under section 30 of GST Act can be granted subject to the petitioner making payment of dues and other statutory penalty/fine for moving the application under section 30 of the GST Act,” the bench added.

Therefore, the Court allowed the petition and held that the writ petition succeeded to the extent that the petitioner may file an application under section 30 of the GST Act within a period of 30 days and the period of limitation shall be counted from the date of this order.

Case Title: Abdul Satar Vs Principal Commissioner, Central Goods and Service Tax & CX (Jharkhand High Court)

LL Citation: 2024 LiveLaw (Jha) 56

Click Here To Read Judgement