In Ramakrishnan Mahalingam Proprietor of M/s Prateeksa Bharat Gas Gramia Vitrak Vs State Tax Officer(Circe), Goods & Services Tax Officer, Kotagiri & Ors in W.P. No.15081 of 2020 and WMP.Nos.18799, 18801 & 18797 of 2020, Madras High Court held that revival of GST Registration cannot be subject to any assessment.
Whether Revival of GST registration made conditional upon the petitioner payment of tax dues and substantiating its claim of Input Tax Credit is justified.
The Petitioner filed two applications for revocation of registration under Section 30 of TGST Act,2017.
As per Section 30 of the Act, an application may be made by an assessee whose registration is cancelled before the assessing authority and the authority, upon consideration of the same and after hearing the petitioner must take a decision on whether the registration is to be revived or the application rejected.
The applications were rejected under two orders due to non compliance and outstanding interest on belated payment of tax dues and for allegedly wrongful claim of ITC.In one of the order, an appeal was filed but was subsequently withdrawn. Thereafter, writ was filed.
The Respondent submitted that the revival of registration is conditional upon the petitioner satisfying tax dues and substantiating its claim of ITC.
Whereas, the Petitioner contended that the revocation/revival of registration only, and in the guise of considering the application for revocation, the authorities cannot embark upon the process of assessment.
Observation and Finding
The Court prima facie held that conditional revival of GST registration is misconceived.
The Court went on to observe that
An assessment would have to be made by the authority in terms of Section 73 or other applicable provision after following the procedure set out therein, and it is only in the course thereof that the officer may consider and decide questions of leviability of tax and claim of input tax credit.
Thus to state that registration will not be revived since the petitioner has incorrectly availed of ITC would be putting the cart before the horse. In fact, it is seen that the petitioner has filed monthly returns as well as annual returns for the periods January 2017-18 to September 2019-20 and for financial years 2017-18 and 2018-19 and has also remitted late fee for filing of belated returns. Thus, and these being the only conditions that are to be satisfied by the petitioner for grant of revocation of registration, I am of the view that the cancellation of the registration in this case is incorrect and improper.
Finally, the Court held that
Let the first respondent pass an order reviving the registration of the petitioner forthwith. Needless to say, the respondent is at liberty to take up matters of assessment thereafter, in accordance with law.
It also affirms the jurisprudence that what is ought to be done in a manner prescribed, then it has to be done in that manner alone. Artificial conditions cannot be added merely because the department has to decide upon revocation of GST registration.
The registration revival provision no where lays down assessment and payment of entire outstanding as any condition precedent to according such a request of revival of GST registration. Further, a well defined provisions towards assessment are already inbuilt in the enactment itself.Therefore, making the revocation to be conditional is bad in law.
This decision will enlighten other tax payers to take an informed step to safeguard their business interest in as much as what is provided in law cannot be used in an arbitrary manner by the Department.
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