Cancelled GST Registration Cannot Be Restored Solely To Claim ITC Benefit U/S 16(6) CGST Act: Kerala High Court

The Kerala High Court has held that a cancelled GST registration cannot be restored solely to claim the ITC (Input Tax Credit) benefit under Section 16(6) CGST Act (Central Goods and Services Tax Act, 2017). Section 16(6) of the Central Goods and Services Tax Act, 2017, enables the taxpayer to claim the input tax credit available in the ledger, in case the order cancelling the registration is revoked by any order, either under Section 30 or pursuant to any order made by the appellate authority or appellate tribunal or by this Court. Justice Ziyad Rahman A.A. stated that Section 16(6) does not envisage a fresh cause of action in respect of the taxpayers, whose registration is cancelled, for getting the restoration of the registration, only for the purpose of availing the benefit of Section 16(6). The assessee/petitioner was engaged in the distribution of SIM cards and recharge coupons. The assessee had closed down the business, and the registration was cancelled, based on the application submitted by him with effect from 30.11.2018. However, at the time of the cancellation of the registration, there was no liability for tax upon the assessee. Later, an intimation under Section 73(5) was issued to the assessee on 24.12.2022, proposing to demand an amount of Rs. 1,52,060/- along with interest. An order was passed confirming the demand. The order was not challenged by the assessee by filing an appeal. Subsequently, with effect from 01.10.2024, a new provision, namely, Section 16(6), was introduced in the CGST Act as per the Finance Act 2024. The assessee has filed a petition to restore the registration to enable him to file returns and to avail the eligible input tax credit in terms of Section 16(6). The bench, after analysing Section 16(6), noted that the said benefit is applicable only in respect of the taxpayers, whose registration was cancelled and later such cancellation was revoked by the order passed by the authorities or by this Court. The bench stated that as of the date when the order was passed, Section 16(6) was not in force, and therefore, the benefit, which was not available to the taxpayer as of the date of the order, cannot be availed by the assessee, merely because, on a subsequent date, a provision was incorporated. The bench opined that the reliefs sought by the assessee to restore the registration are only for the purpose of availing the benefit of Section 16(6) of the CGST Act, and not in relation to any circumstances referred to in the Act. In view of the above, the bench dismissed the petition. Case Title: Saleena Shaul Hameed v. The State Tax Officer Case Number: WP(C) NO. 40341 OF 2025Citation : 2025 LiveLaw (Ker) 753 Counsel for Petitioner/Assessee: Padmanathan K.V. and R. Sreejith Counsel for Respondent/Department: P.R. Sreejith Click Here To Read/Download The Order

Cancelled GST Registration Cannot Be Restored Solely To Claim ITC Benefit U/S 16(6) CGST Act: Kerala High Court

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