Umesh Kumar vs. State Of U.P. And 3 Others

Held

The Court held that the rejection of the petitioner's revocation application solely on the ground of delay was unsustainable. The Court noted that the petitioner had deposited the entire tax dues and filed his returns on 30.1.2021, a fact not denied by the State in its counter-affidavit. Furthermore, the counter-affidavit did not establish the date of service of the cancellation order upon the petitioner, which is crucial for determining the 30-day period under Rule 23. The Court emphasized that the purpose of Rule 23 is to provide an opportunity for revocation and to ensure smooth business operations. Citing the decision in M/s Ansari Constructions, the Court stated that if the department accepts the returns and there are no outstanding dues, it should not obstruct the assessee's business. Consequently, the orders dated 14.5.2019 (cancellation of registration) and 25.3.2021 (dismissal of appeal) were quashed. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Umesh Kumar, an assessee under the U.P. Goods and Services Tax Act, 2017, had his GST registration cancelled by an order dated 14.5.2019 due to non-filing of returns. A show cause notice dated 29.4.2019 had indicated outstanding Central Tax of Rs.3,21,205/- and State Tax/UT Tax of Rs.3,21,205/-. The petitioner deposited the entire tax amount of Rs.7,29,748/- on 30.1.2021 and filed his returns on the same day. Subsequently, he filed a revocation application under Rule 23 of the U.P. GST Rules, 2017 on 3.2.2021. This application was rejected by the Taxing Authority on 17.2.2021, and a subsequent appeal before the First Appellate Authority was also dismissed by an order dated 25.3.2021, both on the ground of delay in filing the revocation application.

Key Issues

1. Whether the rejection of the petitioner's GST registration revocation application, solely on the ground of delay in filing, is sustainable in law, considering the petitioner has deposited the entire tax dues and filed returns, and the date of service of the cancellation order is not established (Section 29 of the CGST Act, 2017 and Rule 23 of the U.P. GST Rules, 2017)? Petitioner's contentions: The petitioner argued that the findings of the First Appellate Authority were incorrect as he had paid the entire disputed tax amount of Rs.7,29,748/- and filed his returns on 30.1.2021. He contended that the rejection of his revocation application on the ground of non-filing of returns was factually wrong. He relied on the Madras High Court decision in Tvl. Suguna Cutpiece Center vs. The Appellate Deputy Commissioner (ST) (GST) and others, and a coordinate Bench decision in M/s Ansari Constructions vs. Additional Commissioner Central Goods and Services Tax (Appeals) and 2 others. Respondent's contentions: The State relied on Rule 23 of the U.P. GST Rules, 2017, arguing that the revocation application must be filed within 30 days of the service of the cancellation order. Since the registration was cancelled in 2019 and the application was filed in 2021, both the Assistant Commissioner and the Appellate Authority rightly rejected it.