Facts of the Case

The petitioner, Sri Manoranjana Panda, proprietor of M/s. Raghunath Traders, holding GSTIN/UIN 21BLDPP8023R2ZQ, had his GST registration cancelled by the Superintendent of Bhadrak Circle by order dated 14th February, 2020, under the CGST Act, 2017, for non-furnishing of returns for a continuous period of six months. The petitioner's registration was cancelled after he failed to respond to the GSTR-3A and REG-17 notices, and did not appear despite an opportunity of personal hearing. The petitioner explained the default was on account of prolonged illness and, expressing willingness to file all pending returns, sought revocation of the cancellation. When the authority did not consider his application favourably, he approached the Orissa High Court under Article 226 of the Constitution.

Issues Involved

  1. Whether the delay in seeking revocation of the cancelled GST registration could be condoned.
  2. Whether the authority ought to be directed to consider the application for revocation on the petitioner complying with statutory requirements of tax, interest, penalty and late fee.

Petitioner's Arguments

  • The petitioner submitted that non-furnishing of returns leading to cancellation was due to prolonged illness, and he had expressed his willingness to file all periodic returns.
  • Counsel submitted the petitioner was agreeable to discharge his liability by depositing tax, interest and penalty along with late fee, and cited the Orissa High Court's own prior orders in Debendra Nayak v. The Commissioner, CT & GST, Odisha and Basanta Kumar Palita v. The Commissioner, CT & GST, Odisha, seeking similar relief.

Respondent's Arguments

  • The Senior Standing Counsel for the Opposite Parties submitted that the revocation application had rightly been rejected since the petitioner himself admitted it was filed with delay.
  • It was further submitted that the petitioner was required to comply with statutory requirements, including payment of tax, interest and penalty along with late fee, and to furnish all pending returns, before revocation could be considered.

Court Order/Findings

  • The Court examined Section 30 of the CGST Act, 2017 and sub-rule (1) of Rule 23 of the CGST Rules, which together prescribe that a registered person may apply for revocation of cancellation within thirty days of service of the cancellation order, that such application cannot be rejected without a hearing, and that where cancellation followed non-furnishing of returns, revocation cannot be sought unless the pending returns are furnished and the tax, interest, penalty and late fee due thereunder are paid.
  • Noting the petitioner's concession to comply with these statutory requirements, the Court condoned the delay in invoking Rule 23(1).
  • The Court directed that upon the petitioner complying with the statutory requirements within two weeks of receipt of the order, the application for revocation shall be considered by the competent authority in accordance with law.
  • The department was directed to open the portal to enable the petitioner to file the pending returns, subject to compliance with the conditions imposed.

Important Clarification

  • Revocation of a GST registration cancelled for non-filing of returns is conditional under the second proviso to Rule 23(1): the registered person must first furnish all pending returns and pay the tax, interest, penalty and late fee due, before an application for revocation can even be entertained.
  • Courts have been willing to condone delay in seeking revocation where the assessee demonstrates bona fide reasons (such as illness) and undertakes to comply with the statutory pre-conditions, directing the authority to consider revocation on such compliance rather than leaving the registration permanently cancelled.

Sections Involved

  • Section 30, CGST Act, 2017 — provides for revocation of cancellation of registration on application by the registered person within thirty days of service of the cancellation order, and bars rejection of such application without a hearing.
  • Rule 23, CGST Rules, 2017 — prescribes the procedure and form (FORM GST REG-21) for seeking revocation, and mandates furnishing of pending returns with payment of tax, interest, penalty and late fee where cancellation was for non-filing of returns.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee — delay was condoned and the authority was directed to consider revocation, but only upon the petitioner fulfilling the statutory pre-conditions of filing returns and depositing dues within two weeks.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: High Court of Orissa at Cuttack
  • Case No.: W.P.(C) No. 7407 of 2022
  • Coram: Justice Jaswant Singh and Justice M.S. Raman
  • Date of Order: 6 April 2022

Link to Download the Order

Download the full judgment (PDF)

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