Pushpa Devi vs. Commissioner

Held

The Court held that the order dated 05.06.2024, rejecting the petitioner's application for revocation of cancellation of registration, was cryptic and non-speaking. The Proper Officer merely stated that the application was rejected in accordance with the provisions of the Act, without assigning specific reasons, which is contrary to the duty cast upon the Proper Officer under Rule 23(2)(B) of the CGST Rules, 2017, to record reasons in writing. While the Court acknowledged that the Proper Officer might not be able to delve into the mismatch issue under Section 30, it noted that the show cause notice for rejection did mention this mismatch. Therefore, at least some cogent reasons were expected in the rejection order. The Court found the rejection order unsustainable due to the lack of reasoning. Consequently, the impugned order dated 05.06.2024, and all consequential orders, were set aside. The matter was remitted back to the Proper Officer (respondent no. 4) for fresh consideration, requiring the issuance of a fresh show cause notice on the revocation application, providing an opportunity of hearing, and passing a reasoned and speaking order.

Facts

The petitioner, Pushpa Devi, a proprietor engaged in works contract, filed a writ application challenging the cancellation of her GST registration. The registration was initially cancelled by the Proper Officer (respondent no. 4) on 06.05.2024, based on a show cause notice dated 06.02.2024, for failing to furnish returns for a continuous period of six months. Subsequently, the petitioner filed her final return (GSTR-10), all pending returns, and paid the tax for July-September and October-December 2023-24. She then applied for revocation of cancellation on 08.05.2024. Respondent no. 4 issued another show cause notice on 15.05.2024 for rejection of this revocation application, citing a mismatch between GSTR-1 and GSTR-3B. This application was rejected by an order dated 05.06.2024, without assigning specific reasons. The petitioner's appeal against this rejection was dismissed in limine by the Appellate Authority on 29.12.2025, on grounds of delay.

Key Issues

1. Whether the Proper Officer, while considering an application for revocation of GST registration under Section 30 of the GST Act, 2017, can examine the aspect of mismatch between GSTR-1 and GSTR-3B when the initial cancellation was on the ground of non-filing of returns? (Section 30, Section 73 of the GST Act, 2017). The petitioner argued that the Proper Officer's power under Section 30 is limited to considering whether returns have been filed and tax paid, and that the issue of mismatch falls under the purview of the Adjudicating Authority under Section 73. The petitioner also contended that the order rejecting the revocation application was non-speaking and lacked reasons, violating Rule 23(2)(B) of the CGST Rules, 2017, and a precedent from this Court. The State argued that the Proper Officer can consider non-furnishing of outward supply details in GSTR-1 under Section 37, which is in excess of declared outward supplies in GSTR-3B, as per Rule 21(F) of the Rules, and that the rejection order was passed in accordance with the Act.