Noble judgment of High Court regarding restoration of canceled registration

- Sales Tax : Soham Mashruwala

The GST law is atrocious. Bringing the GST law in India has also brought benefits but there is a huge controversy regarding the taxation. In this law, taking the instance of registration to persecute everyone continuously, the water falls under the GST law and then if the form becomes delinquent and the form is not filled for six consecutive months, then the instance of registration is suspended or Cancellation is done by the officials of the account. Now in this situation when the supplier pays the tax-interest-penalty to remove all the deficiency from the sheet defaulter but many a times the application for restoration of the registration instance is delayed, it is a very bad situation. Something similar before the Allahabad High Court in Umesh Kumar Vs. State of U.P. (Writ Tax no. 648/ 2021 dated 25-11-2022) which has been discussed in today's article.

Rule 23

Rule 23 provides the procedure when the instance of registration of a supplier has been canceled and is to be revived. As per the provisions of Rule 23(1) if all the forms are to be filled up within 30 days from the date of order to restore canceled supplier registration number and further within 30 days from the date of order as per Rule 23(1) application for revocation is to be made in Form GST REG21. The Additional Commissioner has the power to extend this time limit.

Dispute before the Allahabad High Court

The applicant's registration number was canceled due to non-filling of the form. The applicant filled all the forms and also paid the amount due. Subsequently, an application was made to restore the registration number, but the application was made after the lapse of 30 days under Rule 23. The account was not ready to accept this and the registration number was not restored by it. All this tussle reached the doorstep of the Allahabad High Court with the account contending that the application should be rejected as it was filed after the prescribed time and the registration number could not be restored.

Judgment of Allahabad High Court

The Allahabad High Court observed that the registration number was not restored by the account as only the application time board. When the account has accepted the forms and the application is late it is not appropriate not to restore the registration. The purpose of Rule 23 is to provide an opportunity which was not provided in this case and the delay was condoned to reinstate the application.