M/S Ansari Construction vs. Additional Commissioner Central Goods And Services Tax (Appeals) And 2 Others

Held

The Court held that the Assistant Commissioner's rejection of the petitioner's revocation application was arbitrary, as there was no effort to verify the petitioner's assertions that all returns were filed and dues cleared. The Court found the show cause notice issued by the Assistant Commissioner to be wholly unacceptable and vague. The Appellate Authority was also found to have committed manifest arbitrariness by dismissing the appeal on the ground that facts could not be verified at the appellate level. The Court noted the contradictory stands of the Department, with the appellate authority claiming non-verification while later instructions confirmed no dues were pending. The Court found that the Department had unnecessarily harassed the assessee. Consequently, the Court set aside the order cancelling the registration and the appellate order, directing that the application for revocation of registration be allowed. The cancellation of registration was deemed revoked from the date of filing the application. The writ petition was allowed with costs of Rs. 10,000/- to be paid by Respondent No. 2 from his salary.

Facts

The petitioner, M/s Ansari Construction, a proprietorship firm, had its GST registration cancelled on November 30, 2019, by the Assistant Commissioner (Respondent No. 2) for failing to file returns for a continuous period of six months, invoking Section 29(2)(c) of the UP GST Act, 2017. The petitioner applied for revocation of cancellation on December 19, 2019, stating all pending returns (GSTR-3B and GSTR-1) were filed and liabilities cleared with late fees. Respondent No. 2 issued a vague show cause notice on December 29, 2019, and subsequently rejected the revocation application on January 30, 2020, stating the petitioner only claimed interest payment without providing challan details. The petitioner's appeal to the Additional Commissioner (Respondent No. 1) was dismissed on July 6, 2020, citing the petitioner's failure to upload documents and verify facts.

Key Issues

1. Whether the Assistant Commissioner erred in rejecting the petitioner's application for revocation of GST registration without adequately verifying the petitioner's claim that all pending returns had been filed and dues cleared, contrary to the proviso to Rule 23(1) of the UP GST Rules, 2017? 2. Whether the Appellate Authority erred in dismissing the petitioner's appeal by holding that facts could not be verified at the appellate level and relying on a divisional office mail, despite the petitioner providing evidence of dues clearance? Petitioner's arguments: The petitioner contended that all returns were filed, and dues, including tax, late fees, and interest, were cleared. They argued that the show cause notice issued by the Assistant Commissioner was vague and that the authority failed to verify the facts from their own records. They also argued that the Appellate Authority's reasoning for dismissal was arbitrary and against the purpose of a statutory appeal. Respondent's arguments: The respondents, through instructions received by their counsel, eventually conceded that the taxpayer had filed GSTR-3B up to November 2019, and there were no dues pending towards tax, late fee, or interest up to that period. They submitted copies of DRC-03 challans evidencing payment of remaining interest.