Facts of the Case

  • Petitioner Status: The Petitioner, M/s Tarun Trading Co., is a registered taxable entity operating under the Goods and Services Tax framework in the state of Odisha.
  • Cancellation of Registration: The GST registration of the Petitioner was cancelled by the proper officer of the Opposite Parties (GST Department) due to non-compliance or non-filing of statutory returns within the prescribed timelines.
  • Procedural Delay: The Petitioner failed to file the application for the revocation of the cancellation of their GST registration within the statutory period mandated under the GST regulations.
  • Approaching the Court: Being aggrieved by the cancellation and the subsequent inability to access the GST portal to file regular monthly returns, the Petitioner filed a Writ Petition [W.P.(C) No. 30833 of 2022] before the Hon'ble High Court of Orissa seeking judicial intervention to condone the delay and restore their registration.

Issues Involved

  • Whether the delay exercised by the Petitioner in invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) for filing the revocation of registration cancellation application could be condoned by the Court.
  • Whether the proper officer could be legally directed to open the online GST portal to enable the taxpayer to file pending Form GSTR-3B returns, subject to the complete liquidation of all outstanding statutory liabilities.

Petitioner’s Arguments

  • Willingness to Comply: The learned counsel representing the Petitioner, Mr. Adhiraj Mohanty, argued that the Petitioner is completely ready and willing to comply with all statutory obligations.
  • Payment of Liabilities: It was submitted that the Petitioner is prepared to deposit all outstanding taxes, accrued interest, applicable late fees, and penalties due to the government exchequer.
  • Business Hardship: The Petitioner argued that without the restoration of the GST registration and access to the portal, they are unable to carry out lawful business operations, which severely impacts their livelihood and business continuity.

Respondent’s Arguments

  • Conditional No-Objection: Mr. Susanta Kumar Pradhan, learned Additional Standing Counsel (CT & GST) appearing on behalf of the state, along with Mr. Abinash Kedia, Jr. Standing Counsel for Opposite Party No. 3, presented a fair stand on advance notice.
  • Acceptance of Returns: The revenue authorities stated that they have no objection to the acceptance of the Petitioner's Form GSTR-3B returns, provided the delay in filing the revocation application is condoned by the Court and the Petitioner fulfills all pending compliance criteria.
  • Recovery of Revenue: The respondents emphasized that the acceptance of returns and consideration of the revocation application must be strictly conditional upon the Petitioner paying all dues, including taxes, interest, late fees, and penalties.

Court Order / Findings

  • Condonation of Delay: The Division Bench of the Hon'ble High Court of Orissa, comprising the Hon'ble Chief Justice Dr. S. Muralidhar and Hon'ble Justice M. S. Raman, condoned the delay in the Petitioner invoking the proviso to Rule 23 of the OGST Rules.
  • Direction to Consider Revocation: The Court ordered that subject to the condition that the Petitioner deposits all the taxes, interest, late fees, penalties, etc., due, and satisfies other legal formalities, the application for revocation must be evaluated in accordance with the law.
  • Reopening of GST Portal: The High Court directed the Petitioner to produce a certified copy of the court order before the concerned proper officer. Upon verification and subject to compliance with the financial conditions, the proper officer was instructed to open the GST portal to enable the Petitioner to successfully file their pending GST returns. The writ petition was accordingly disposed of.

Important Clarification

  • Revenue vs. Technicality: The judgment clarifies that the primary objective of the GST administration is the collection of valid revenue and ensuring statutory compliance. Procedural delays in applying for revocation should not permanently block an honest taxpayer from returning to the formal economy if they are willing to pay all financial penalties and interest.
  • Conditional Relief: The relief granted is not absolute; the activation of the portal and consideration of the revocation application are strictly contingent upon the complete payment of all outstanding statutory liabilities.

Section Involved

  • Section 30 of the CGST / OGST Act, 2017: Revocation of cancellation of registration.
  • Rule 23 of the CGST / OGST Rules, 2017: Procedure and timelines for filing an application for revocation of cancellation of GST registration.

Link to download the order -https://mytaxexpert.co.in/uploads/1783311726_895compressed.pdf

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