GST Registration Cancellation Revoked Due to Communication Gap, Assessee Granted Opportunity to Apply for Revocation

GST Registration Cancellation Revoked Due to Communication Gap, Assessee Granted Opportunity to Apply for Revocation

Issue: Whether the cancellation of GST registration for non-filing of returns for six consecutive months can be revoked when the assessee attributes the lapse to a communication gap with their consultant, and both parties agree the matter is covered by a similar precedent.

Facts:

• The assessee’s GST registration was cancelled due to the non-filing of GST returns for six consecutive months.
• The assessee explained that this failure was caused by a communication gap with their consultant.
• Both the assessee and the department agreed that the matter was covered by a previous order in Salman Qureshi v. Commissioner [Writ Petition No. 345 of 2023, dated 14-2-2023], where identical issues had been decided.

Decision: In view of the consensus between the parties, the writ petition was decided in terms of the order in Salman Qureshi (supra). The assessee was granted liberty to apply for revocation of the cancellation order under Section 30 of the Central GST Act, 2017. This application was to be accompanied by the GST returns that had not been filed and the deposit of any outstanding GST dues. If such an application was made within the stipulated time, the competent authority was directed to consider it and pass an appropriate order as per law. The decision was in favor of the assessee.

Key Takeaways:

• Reliance on Precedent/Consensus: The court readily accepted the consensus between the parties that the issue was covered by a previous judgment, allowing for a swift resolution. This highlights the importance of consistent application of legal principles.
• Communication Gap as Valid Explanation: While not a blanket excuse, a genuine “communication gap with consultant” can be a valid reason for non-compliance, particularly if the assessee demonstrates willingness to rectify the situation.
• Opportunity for Revocation (Section 30): Section 30 of the CGST Act provides a mechanism for the assessee to apply for revocation of a cancellation order. This is a crucial statutory remedy.
• Conditions for Revocation: The court’s order sets clear conditions for the assessee to avail the revocation:
  • Filing an application under Section 30.
  • Filing all outstanding GST returns.
  • Depositing all outstanding GST dues.
• Departmental Obligation: The competent authority is obligated to consider such an application and pass an order as per law, ensuring that if the conditions are met, the revocation is granted.
• Focus on Compliance, Not Permanent Cancellation: The court’s approach emphasizes facilitating compliance rather than permanently penalizing an assessee for a curable default, especially when the default is explained and the assessee is willing to rectify.
• Judicial Discretion: The court’s willingness to entertain the writ petition and provide a specific path for revocation, rather than outright dismissing it due to an alternate remedy, indicates a pragmatic approach in cases where the issue is clear and a resolution can be achieved through directed compliance.