M/S. Simran Interior And Exterior Designer vs. The Union Of INDIA

CWJC/4395/2024HC PatnaGSTCNR BRHC01023318202412 March 2024Bench: MR. JUSTICE HARISH KUMAR,THE CHIEF JUSTICE-4 pages

AI SummaryDismissed

Facts

The petitioner, M/s. Simran Interior and Exterior Designer, is challenging the cancellation of its GST registration, which was issued on 11.07.2022. The cancellation was due to the petitioner's failure to file GST returns for a continuous period of six months. The petitioner filed a reply, but the default was established. Subsequently, the Central Board of Indirect Taxes and Customs issued a notification (Annexure-P/3) on 31.03.2023, providing an opportunity for revocation of cancelled registrations until 30.06.2023, later extended to 31.08.2023. The petitioner claims to have filed an application for revocation after filing the pending returns and paying dues. However, a notice was issued on 11.07.2023, demanding payment of Rs. 5817/- as interest, with only three days given for compliance.

Held

The Court held that the application for revocation of cancellation was governed by the notification dated 31.03.2023 (Annexure-P/3 series). Clause (b) of this notification explicitly mandates that an application for revocation shall be filed only after furnishing all due returns up to the effective date of cancellation and after paying any amount due as tax, along with interest, penalty, and late fees in respect of such returns. The Court found that it was incumbent upon the petitioner to compute and pay the tax, interest, and late fees and file the returns *before* submitting the application for revocation. The Court noted that the respondent-authority was indulgent in giving three days to pay the Rs. 5817/- interest, as the notification itself required these payments to be made prior to the revocation application. The Court distinguished this situation from Rule 23, which provides a seven-day show-cause notice for cancellation, stating that the benefit of revocation under the notification was conditional and had to be scrupulously followed. Therefore, the petitioner's contention regarding the seven-day notice period was not accepted in the context of the revocation application conditions. The Court found no reason to entertain the writ petition.

Key Issues

1. Whether the petitioner's application for revocation of GST registration cancellation was maintainable given the conditions stipulated in the notification dated 31.03.2023 (Annexure-P/3 series)? 2. Whether the petitioner fulfilled the conditions precedent for filing an application for revocation of cancellation of registration as per clause (b) of the notification dated 31.03.2023? 3. Whether the petitioner was entitled to a seven-day notice period for payment of interest, as provided under Rule 23 of the Bihar Goods and Services Tax Rules, before the issuance of the demand notice for Rs. 5817/-? Petitioner's arguments: The petitioner contended that they filed the application for revocation after filing returns and paying dues. They argued that they were given only three days to make the payment of Rs. 5817/- as interest, which is contrary to Rule 23 of the Bihar Goods and Services Tax Rules, providing for seven days' time. Revenue's arguments: The revenue argued that the conditions for revocation, as laid out in the notification, required the petitioner to furnish all due returns and pay all amounts due as tax, interest, penalty, and late fee *before* filing the application for revocation. The revenue asserted that the petitioner failed to comply with these pre-conditions.

Sections Cited

Rule 23

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.4395 of 2024 ====================================================== M/s. Simran Interior and Exterior Designer having its office at Road No. 9, Rajeev Nagar, PS - Rajeev Nagar District - Patna, Bihar, through its Proprietor, Rahul Dev, aged about 36 years (M), Son of Ashok Kumar Jha, Resident of Biharganj, PS- Bihariganj, District-Madhepura, State - Bihar ... ... Petitioner/s Versus 1. The Union of India Through the Secretary Department of Revenue, Ministry of Finance, North Block, New Delhi-110001. 2. The Secretary Department of Revenue, Ministry of Finance, North Block, New Delhi-110001. 3. The State of Bihar through the Commissioner cum Secretary, Commercial Tax Department, Govt. of Bihar, Patna. 4. The Commissioner cum Secretary, Commercial Taxes Department, Govt. of Bihar, Patna. 5. The Commissioner of Central GST, Patna, Bihar 6. The Additional Commissioner of Central GST (Appeals), Patna, Bihar. 7. The Superintendent, Central GST, Danapur Range, Division Patna West, Bihar. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Madan Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, CGST & CX Mr. Shivaditya Dhari Sinha, AC to ASG Mr. Devansh Shankar Singh, AC to ASG ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE HARISH KUMAR

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 12-03-2024 The petitioner is aggrieved with the cancellation of registration issued on 11.07.2022 for non-compliance of the statutory provision which requires filing of returns on the due date. Such default averred for a continuous period of six 2/4 months, led to the cancellation of registration.

The petitioner’s registration, as per Annexure- P1 was threatened to be cancelled because returns were not filed for a continuous period of 6 months. The petitioner filed a reply but, however, the fact of non-filing of returns stood established. Even in the present writ petition there is no denial of the specific default pointed out.

Later, the Central Board of Indirect Taxes and Customs brought out Annexure-P/3 notification on 31.03.2023. The same provided an escape valve for revocation of cancellation of registration, to be filed up to 30.06.2023, which was later extended to 31.08.2023. The notifications are produced along with Annexure-P/3. According to the petitioner’s counsel, the petitioner filed an application for revocation of cancellation after filing the returns and paying the amounts but, a notice was issued at Annexure-P/4 dated 11.07.2023 asking the petitioner to pay an amount of Rs.5817/- as interest due. The petitioner’s contention is that he was given only 3 days time to make up the payment while Rule 23 of the Bihar Goods and Services Tax Rules provides for seven days time.

We have to specifically notice that the 3/4 application for revocation of cancellation was under a notification issued at Annexure-P/3 series. The specific contention upon which a revocation can be applied for is available in clause (b) of the said notification, which is extracted herein below:- (b) the application for revocation shall be filed only after furnishing the returns due upto effective date of cancellation of registration and after payment of any amount due as tax, in terms of such returns, along with any amount payable towards interest, penalty and late fee in respect of the such returns. Hence, it is incumbent upon the petitioner to furnish the returns due, till the effective date of cancellation of registration and pay up the amounts due as tax in terms of returns along with any amounts payable towards interest, penalty and late fee in respect of such returns before the application for revocation is filed. It was incumbent upon the petitioner to compute the tax paid along with the interest and make the payments as also file the returns before an application of cancellation of registration is filed. In fact, the respondent-authority was very indulgent in giving 3 days time to pay up an amount of Rs.5817/- when under a relaxed notification, the Government requires the application to be filed based on such conditions, which conditions have to be followed scrupulously failing which the 4/4 benefit would not be available. Rule 23 provides for seven days notice to show cause if a person’s registration is found liable to be cancelled under Rule 29. Here, the benefit conferred on the person is to apply for revocation of cancellation, hedged in with specific conditions. There can be no contention taken that there should have been seven days time given since the notification itself provided for the payment before the application for revocation of cancellation is submitted.

We find absolutely no reason to entertain the writ petition and the same stands dismissed.

sharun/- (K. Vinod Chandran, CJ) ( Harish Kumar, J) AFR/NAFR CAV DATE Uploading Date 14.03.2024 Transmission Date

Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.