Registration cancellation order set aside; authorities directed to decide revocation plea within 15 days under new GST rules.

Case Name:

M/s. Versatile Construction Vs. State Of U.P. (GST HC Case)

Key Takeaways:

- The Central Goods and Services Tax (Removal of Difficulties) Order, 2020, issued under Section 172 of the CGST Act, provided relief for revocation applications filed after cancellation notices.

- The court set aside the previous orders cancelling the petitioner’s GST registration and rejecting their appeals.

- Authorities were directed to decide the petitioner’s revocation application within 15 days, following the new rules.

- The case highlights the impact of the new Order in providing relief to assessees whose registrations were cancelled.

Issue:

Whether the orders cancelling the petitioner’s GST registration and rejecting their appeals can be sustained in light of the Central Goods and Services Tax (Removal of Difficulties) Order, 2020.

Facts:

The petitioner had a GST registration, which was cancelled by the Assessing Authority on 19.1.2019 under Section 29(2)(c) of the CGST Act. The petitioner filed an application for revocation of the cancellation order, which was rejected on 2.11.2019. The petitioner then filed a First Appeal under Section 107 of the CGST Act, which was also dismissed on 31.12.2019. In the absence of a Tribunal, the petitioner filed a writ petition.

Arguments:

The petitioner’s counsel argued that the orders of the Assessing Authority and the First Appellate Court cannot be sustained in view of the Central Goods and Services Tax (Removal of Difficulties) Order, 2020, issued under Section 172 of the CGST Act.

Key Legal Precedents:

The court cited the Central Goods and Services Tax (Removal of Difficulties) Order, 2020, issued under Section 172 of the Central Goods and Services Tax Act, 2017. The relevant portion of the Order states:

“For the removal of difficulties, it is hereby clarified that for the purpose of calculating the period of thirty days for filing an application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act for those registered persons who were served notice under clause (b) or clause (c) of sub-section (2) of section 29 in the manner as provided in clause (c) or clause (d) of sub-section (1) of section 169 and where cancellation order was passed up to 12th June, 2020, the later of the following dates shall be considered:

a) Date of service of the said cancellation order; or b) 31st day of August, 2020.”

Judgement:

The court set aside the orders dated 2.11.2019 (rejecting the revocation application) and 31.12.2019 (dismissing the First Appeal) in light of the Central Goods and Services Tax (Removal of Difficulties) Order, 2020. The court directed the authorities to decide the petitioner’s application dated 19.10.2019 for revocation of the cancellation order dated 19.1.2019 in accordance with the law within 15 days from the date of production of the court’s order.

FAQs:

Q1. What was the main issue in this case?

A1. The main issue was whether the orders cancelling the petitioner’s GST registration and rejecting their appeals could be sustained in light of the new Central Goods and Services Tax (Removal of Difficulties) Order, 2020, which provided relief for revocation applications filed after cancellation notices.

Q2. What was the significance of the Central Goods and Services Tax (Removal of Difficulties) Order, 2020?

A2. This Order, issued under Section 172 of the CGST Act, provided relief to registered persons whose registrations were cancelled by extending the time limit for filing revocation applications in certain cases.

Q3. What did the court direct the authorities to do?

A3. The court directed the authorities to decide the petitioner’s application for revocation of the cancellation order within 15 days, following the new rules laid down in the Central Goods and Services Tax (Removal of Difficulties) Order, 2020.

Q4. What was the impact of this case?

A4. This case highlighted the impact of the new Order in providing relief to assessees whose registrations were cancelled, and it set a precedent for authorities to follow the new rules while deciding revocation applications in such cases.

Q5. What legal principles were established in this case?

A5. The case established the principle that authorities must follow the latest rules and orders issued by the government, even if they contradict previous orders or decisions, as long as the new rules are legally valid and applicable to the case.

The defects reported by Stamp Reporter are being ignored due to prevailing Covid-19 infection. Counsel for the petitioner may remove the defects as and when Covid-19 infection subsides.

The petitioner had a registration under the Goods and Services Tax Act, 2017, which when the Assessing Authority cancelled on 19.1.2019 under Section 29(2)(c) of the Goods and Services Tax Act, 2017(hereinafter referred to as 'the Act), the petitioner filed an application for the revocation of the cancellation order. When, however, the application was rejected on 2.11.2019, the petitioner filed a First Appeal under Section 107 of the Act. Upon the dismissal of the First Appeal on 31.12.2019, in the absence of Tribunal, the instant writ petition was filed.

The contention of the learned counsel for the petitioner is that the orders of the Assessing Authority and of the First Appellate Court cannot be sustained now in view of the Central Goods and Services Act (Removal of Difficulties Order), 2020 issued under Section 172 of the Act.

Since the learned counsel for the petitioner read out the Gazette Notification issued on 25.6.2020, the relevant portion of the notification is being reproduced here as under:-

"NOW, THEREFORE, in exercise of the powers conferred by section 172 of the Central Goods and Services Tax Act, 2017, the Central Government, on the recommendations of the Council, hereby makes the following Order, to remove the difficulties, namely:-

1. Short title.- This Order may be called the Central Goods and Services Tax (Removal of Difficulties) Order, 2020.

2. For the removal of difficulties, it is hereby clarified that for the purpose of calculating the period of thirty days for filing application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act for those registered persons who were served notice under clause (b) or clause (c) of sub-section (2) of section 29 in the manner as provided in clause (c) or clause (d) of sub-section (1) of section 169 and where cancellation order was passed up to 12th June, 2020, the later of the

following dates shall be considered:-

a) Date of service of the said cancellation order; or

b) 31st day of August, 2020."

Learned Standing Counsel did not dispute that the Gazette Notification.

Under such circumstances, the orders dated 2.11.2019 passed by the Assistant Commissioner, Sector-8, Jhansi and 31.12.2019 passed by the Additional Commissioner Grade -2 (Appeal) 1st Commercial Tax, Jhansi, are set aside. The application dated 19.10.2019 which was filed by the petitioner for the revocation of the cancellation order dated 19.1.2019 shall now be decided

in accordance with law within a period of 15 days from the date of production of a copy of this order.

The Authority concerned may verify the correctness of this order from the Official Website of the High Court, Allahabad, if a certified copy is not submitted.

The writ petition is disposed of.

Order Date :- 7.7.2020

PK