Revocation of Cancellation of GST Registration
In the realm of GST regulations, the process of Revocation of Cancellation of GST registration plays a pivotal role in safeguarding the rights of taxpayers and ensuring the principles of natural justice are upheld. In this article, we will discuss the process of revoking the cancellation of GST registration governed by the provisions of the Gujarat GST Act, 2017, (herein “the Act”) which closely mirror those of the UP GST Act, 2017, the process demands meticulous attention to legal procedures and time-bound actions. As highlighted in the case of Apparent Marketing Private Limited vs State Of U.P., the significance and relevance of this process come to the fore as the court set aside the cancellation of the petitioner’s firm’s GST registration and reaffirmed the importance of providing the concerned party with an opportunity to rebut the charges. Understanding the step-by-step process, from the initial cancellation to the potential remedies of appeal and writ petition before the High Court, becomes imperative for taxpayers facing similar situations. In this context, we outline the essential aspects of the process and the legal grounds.
Introduction
Who has the power to cancel registration?
Proper Officer has been defined in Section 2 (91) of the Act, as
“proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the State tax who is assigned that function by the Commissioner;
Voluntary GST Cancellation
If an individual or business with GST registration decides to cancel their GST registration voluntarily, they need to submit a cancellation request to the GST Department using Form GST REG-16. The GST Officer will carefully review the application, and if everything is in order, they will issue an official order to terminate the GST registration, and this will be documented in Form GST REG-19.
The Proper Officer is responsible for examining the application and issuing an order for cancellation in Form GST REG-19 within 30 days from the date of application. The cancellation will take effect from a date determined by the Officer, who will then inform the taxable individual about the same.
When can PO Cancel Registration?
As highlighted in Section 29 (2) proper officers have the authority to cancel someone’s registration under certain circumstances. This cancellation can take effect from any date, even in the past. The reasons for cancellation are as follows:
- If the registered person has violated the rules and regulations mentioned in the Act or the rules set by the authorities.
- If a person who pays taxes under a specific section (Section 10) has not submitted their tax returns for three consecutive tax periods.
- If any registered person, except for those mentioned in (b), has not submitted their tax returns continuously for six months.
- If a person who voluntarily registered themselves under Section 25(3) has not started their business within six months from the date of registration.
- If the registration was obtained through dishonesty, deliberate false statements, or hiding important information.
It is of importance to note that, PO cannot cancel a person’s registration without giving the concerned person an opportunity of being heard.
Revocation of Cancellation of GST Registration
As per Section 30 of the Act,
(1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.
(2) The proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application
Application for Revocation of Cancellation
If the GST registration of a firm is cancelled, the firm can apply for the revocation of cancellation under Section 30 of the Act. The application for revocation should be made within 30 days from the date of service of the cancellation order.
If the GST Officer is content, they have the authority to revoke the registration cancellation within 30 days after receiving the application. This will be done by issuing an order in form GST REG-22. The reasons behind the revocation or cancellation of registration must be clearly documented in writing.
However, the Officer can reject the revocation application and notify the applicant by issuing an order in form GST REG-05. Before rejecting the application, the Officer must first send a show-cause notice in GST REG-23 to the applicant, asking them to provide reasons why the application should not be turned down. The applicant must respond using form GST REG-24 within seven working days upon receiving the notice. The proper officer will then make a decision within 30 days of receiving the applicant’s clarification in form GST REG-24.
Extended Time limit to apply for Revocation of GST
As per CGST notification no: 03/2023
The department extended the time limit to apply for revocation of GST registrations cancelled on or before 31st December 2022. The reasons for cancellation should be due to the non-filing of tax returns. Also, only the taxpayers who couldn’t apply for revocation within 30 days of the cancellation order can file it.
Appellate Remedy
If the application for revocation of cancellation is rejected, the firm can appeal the decision under Section 107 of the Gujarat GST Act, 2017. The appeal should be filed within 3 months from the date on which the decision or order sought to be appealed against is communicated to the person aggrieved.
Appellate Authority reserves the discretion to permit the appellant to present their appeal within an additional period of one month if they are convinced that the appellant had a sufficient cause that prevented them from submitting the appeal within the initial three-month period.
Hence, if someone wants to file an appeal regarding a tax-related decision, they must:
1. Before filing the appeal, the person must first pay the part of the tax, interest, fine, fee, and penalty that they agree they owe based on the disputed order.
2. Additionally, they need to pay an amount equal to 10% percent of the remaining disputed tax amount mentioned in the order.
Once the person has paid said amounts, the government will not take any immediate action to collect the remaining disputed tax until the appeal is resolved. It’s like a temporary halt on the collection process until the appeal is dealt with.
