M/S. Varsha Ritu vs. The Union Of INDIA

Held

The Court held that the respondents should reconsider the petitioner's registration as a composite dealer effective from 31.03.2018. The reasoning was based on the petitioner's submission that they applied for cancellation of regular registration and simultaneously for composite registration. The Court noted that the respondents themselves had cancelled the regular registration vide order dated 11.06.2018, with effect from 31.03.2018. Therefore, the respondents were directed to pass a necessary order within 60 days from the date of the order, considering the original application date for composite registration, and strictly in accordance with the law. The ratio decidendi is that when a taxpayer applies for cancellation of one type of registration and simultaneously for another, and the initial registration is cancelled retrospectively, the authorities should process the new application accordingly, considering the effective date of cancellation.

Facts

The petitioner, M/s. Varsha Ritu, was registered as a regular dealer under the GST Act from 31.03.2018. On 28.04.2018, the petitioner applied for cancellation of this regular registration and simultaneously applied for registration as a composite dealer. The respondents cancelled the regular registration vide an order dated 11.06.2018, effective from 31.03.2018. However, the respondents issued a new regular registration to the petitioner vide an order dated 09.06.2018, and subsequently, this regular registration was being cancelled again vide an order dated 30.09.2021. The petitioner contended that the respondents should have granted composite registration after cancelling the regular one. The respondents argued that composite registration could not be considered earlier as the petitioner was already a regular dealer.

Key Issues

1. Whether the respondents erred in granting a new regular registration to the petitioner when the petitioner had applied for cancellation of the existing regular registration and simultaneously applied for composite registration? 2. Whether the respondents should reconsider the petitioner's application for composite registration effective from 31.03.2018, considering the cancellation of the regular registration? Petitioner's Arguments: The petitioner argued that after the cancellation of their regular registration, effective from 31.03.2018, the respondents were free to grant composite registration. They pointed out the inconsistency of cancelling the regular registration retrospectively while issuing a new regular registration and then cancelling it again. They relied on the fact that the respondents themselves cancelled the regular registration vide order dated 11.06.2018 with effect from 31.03.2018. Respondents' Arguments: The respondents made a limited submission that consideration for regular composite registration could not have happened earlier because the petitioner was already registered as a regular dealer.