Goods & Services Tax (GST) in IndiaRegistration cannot be Rejected for non-submission of Non-mandatory Documents

The Allahabad High Court in Ranjana Singh v. Commissioner of Service Tax, [W.P (Tax) 1084 of 2021 decided on 12.12.2021] held that the application for registration cannot be rejected on the mere ground of non-submission of documents which are not mandated under the provisions of law.

FACTS

Ranjana Singh (hereinafter referred to as the “Petitioner”) is engaged in the business of employment through consultancy, that falls under the purview of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the “UPGST Act”). The Petitioner applied for the registration under the UPGST Act on 17.08.2021 by online mode. The Petitioner also provided all the necessary documents, but the registration was rejected by an order dated 23.09.2021. The Petitioner preferred an appeal against the rejection of registration, which was dismissed on 28.10.2021.

The Petitioner has filed the present petition to quash and set aside the impugned order of rejection of registration and the order of the Appellate Authority.

ISSUE BEFORE THE HIGH COURT OF ALLAHABAD  

Whether the non-submission of documents not mandated under the provision of law can be considered as non-compliance and a valid ground for the rejection of a GST registration application?

CONTENTIONS OF THE PARTIES

The Petitioner submitted that all the requisite documents were submitted along with the application of registration. The registration was rejected vide the Impugned Order dated 23.09.2021 for the non-submission of the electricity bill. It is further submitted that the appeal was also rejected on the same ground.

It was contended that the orders are patently illegal, perverse, and against the provisions of law as the provisions of the GST Act only require for providing documents, i.e., PAN and Aadhar as well as the property tax receipt, which were furnished by the Petitioner. Furthermore, the registration has been rejected without considering the documents submitted by the Petitioner.

The Respondent submitted that Rule 8 of the Central Goods and Services Rules, 2017 (hereinafter referred to as the “Rules”), requires the submission of an electricity bill or property tax receipt and hence, the order for non-compliance has been passed.

DECISION AND FINDINGS

The Court referred to the provision of Section 25 of the UPGST Act and held that Section 25(6) of the UGST Act, clearly states that for registration only PAN card and Aadhar Card are required. The Court observed that the registration shall be granted within seven working days if all the documents are provided by the Petitioner. Moreover, clarification can be sought during the inspection.

It was further observed that the premises of the Petitioner were inspected and the details of documents were also verified by the surveying officer. The Impugned order for rejection of registration and rejection of appeal order was unreasoned and merely stated rejection due to non-submission of electricity bill and non-specifying possession of business premises.

It was held that the Petitioner had satisfied the requirement of law by providing the essential documents and in absence of reasons for the rejection of registration, the right of the Petitioner to carry on the business cannot be hampered in an illegal and arbitrary manner.

The Court ruled that the Impugned Order of rejection of registration dated 23.09.2021 and the order of rejection of appeal dated 28.10.2021 cannot be sustained as per the provisions of law and hence, were quashed and set aside. The Court further directed the Respondents to pass an appropriate order within seven days from the date of receipt of this order. The Court further directed for filing of Compliance Report within 45 days with the Registrar General of the Court.

AMLEGALS REMARKS

The Allahabad High Court held that the registration cannot be rejected without stating appropriate reasons for the rejection. Moreover, the registration cannot be rejected on the mere ground of non-submission of the documents which is not mandated under the provisions of the law. The Court has upheld the objective of the legislation of ease of doing business. No person can be denied the right of carrying out his business due to some procedural requirements which are not mandated under the law.

-Team AMLEGALS, assisted by Mr. Vinay Sachdev (Intern)

For any query or feedback, please feel free to get in touch with himanshi.patwa@amlegals.com or rohit.lalwani@amlegals.com