Facts of the Case
Vidyut Majdoor Kalyan Samiti, the petitioner in this case, is a registered society having GST Registration.
The society was issued a show-cause notice for not filing monthly GSTR 3B returns for more than six months. The notice was uploaded on GST portal on 22.08.19 granting a seven-day time to reply to the SCN.
During this period of seven days, the petitioner didn’t visit the GST portal and hence was not aware of the SCN. As a result, it was not able to reply to the SCN. Consequently, the GST registration of the society was thereby cancelled vide order dated 02.09.2019.
The society went into an appeal to the Astt. Commissioner (Appeals), Commercial tax, for relief. The appellate ordered the restoration of GST registration of the society with effect from 02.09.2019.
This order was not implemented as the GST portal kept showing the subject GST registration of the society as “Inactive”.
Therefore, the society has filed a writ petition to direct the that the order issued for restoration of GST registration be complied with and the status on GST portal is restored as active.
Arguments presented from the GST Department side
As per Rule 23 of CGST Rules 2017, a registered person whose GST registration has been canceled by the proper officer on his own may apply for revocation of cancellation of registration in Form GST REG-21 within 30 days from the date of service of cancellation order at the common portal.
The Rule further provides that if the registration was canceled due to the reason of non-filing of returns, then the revocation of cancellation cannot be filed unless all the pending returns are filed and if there is any tax in relation to these returns then it is to be paid along with interest, penalty and late fees.
And also the returns due for the period from the date of cancellation of registration and till the date of the order of revocation of such cancellation, are required to be filed within 30 days from the order of revocation of cancellation.
The department also said that the petitioner was required to furnish a revocation application in Form GST REG 21 and file pending old returns along with taxes, penalty and interest if any which the petitioner has not done.
The department said that there is no provision for manual restoration of GST registration and the application should have been filed on GST portal.
On these grounds the writ petition should be denied, the department said.
Allahabad High Court Verdict
The Allahabad High court said in its judgment that the contention of the department that there is no provision of restoration of GST registration once it has been canceled, is absurd.
If no provision has been made available in the software for restoration of GST registration then it cannot be held to be the fault of the petitioner. The petitioner cannot be made to suffer for this.
It is the department that has to make suitable provisions for the same in the software and in GST portal.
The court also said that the non-compliance of an appellate order which was duly passed by an appellate authority cannot be accepted or permitted.
Allahabad High Court in Vidyut Majdoor Kalyan Samiti vs State Of U.P. And 3 Others vide order dated 18 January 2021, allowed the writ petition and directed the department to restore the GST registration on the GST portal within 10 days from the date of the order.
