M/S Maharaj Ji Enterprises vs. The Union Of INDIA

Held

The Court held that the order rejecting the petitioner's application for GST registration (Annexure P/6) was liable to be set aside as it was an unreasoned order. The Court noted that the circular relied upon by the respondents (CBIC Circular No. 95/14/2019-GST) does not bar fresh applications for registration but requires the Proper Officer to ascertain if a revocation application was filed and if the conditions specified in Section 29(2)(b) and (c) of the CGST Act continue to subsist. The Court found that the rejection order did not record any such finding. The Court also observed that the reason for rejection disclosed in the counter-affidavit was not mentioned in the notice seeking clarification (Annexure P/5). Therefore, the Court set aside the rejection order and remitted the matter back to the Deputy Commissioner of State Tax, Madhubani, for a fresh consideration of the petitioner's application, providing an opportunity to comply with statutory requirements if willing.

Facts

The petitioner, M/s Maharaj Ji Enterprises, had its GST registration cancelled on February 22, 2023, due to non-filing of returns for six consecutive months. Subsequently, the petitioner applied for fresh GST registration after filing updated returns and paying taxes to the extent permitted by the portal. The Deputy Commissioner of State Tax, Madhubani, issued a notice on August 6, 2024, asking the petitioner to file pending returns from the previous registration period until the month before the new application. The petitioner contended that technical limitations on the GST portal prevented filing returns after February 2023. On August 17, 2024, the Deputy Commissioner rejected the fresh registration application via an unreasoned order.

Key Issues

1. Whether the rejection of the petitioner's application for fresh GST registration, vide Order bearing Reference No. ZA1008240503711 dated 17.08.2024, is valid, considering it was passed without assigning reasons and in light of the technical difficulties faced by the petitioner in filing returns post-February 2023, as required by the notice dated 06.08.2024? Petitioner's arguments: The petitioner argued that the rejection order was unreasoned and that technical glitches on the GST portal prevented them from filing returns after February 2023, making compliance with the notice impossible. They relied on the fact that they had filed returns as far as the portal allowed and paid taxes accordingly. Respondents' arguments: The respondents contended that the petitioner did not file a revocation application or appeal against the cancellation of the previous registration. They cited CBIC Circular No. 95/14/2019-GST dated 28.03.2019, stating that a fresh application for registration can be rejected if the earlier registration was cancelled for violations under Section 29(2)(b) and (c) of the CGST Act and revocation was not sought. They also suggested the petitioner could have availed an amnesty scheme and alleged potential tax evasion.