An Appeal u/s 107 of CGST Act against cancellation of GST registration cannot be denied solely because remedy u/s 30 of CGST Act was not exercised by the assessee

The Karnataka High Court has ruled that a business appealing a cancelled GST registration under Section 107 of the CGST Act cannot be denied solely because they didn't first pursue the revocation option under Section 30. The court found that the appeal remedy is independent and should not be disregarded. Consequently, an order dismissing an appeal on these grounds was set aside, with the authority directed to reconsider the case.

The Hon'ble Karnataka High Court in M/sShailaja Chandrashekar v. Additional Commissioner of Central Tax (Appeals), [Writ Petition No. 17778/ 2022 (T-RES) dated October 13, 2022] held that an Appeal under Section 107 of the Central Goods and Services Tax Act, 2017 ("the CGST Act") against the cancellation of a GST registration cannot be disregarded just because the assessee did not avail the remedy under Section 30 of the CGST Act.

Facts

M/s Shailaja Chandrashekar ("the Petitioner") filed a writ petition in the Hon’ble High Court, alleging that the Respondents during a lockdown due to the COVID- 19 pandemic issued an Order dated April 13, 2020, revoking or cancelling the Petitioner's GST registration. The Petitioner could not prefer an Appeal within prescribed period because of the ongoing COVID- 19 pandemic. Petitioner could only prefer an Appeal before the Appellate Authority on March 30, 2022 and the Appellate Authority vide its Order dated April 22, 2022 dismissed the same on the ground that the Appeal is not maintainable since, the only option left to the Petitioner was to approach the concern Officer (Respondent No. 2) for revocation of the cancellation and Restoration of the Registration under Section 30 of the CGST Act.

The Respondent submitted that the writ petition should be dismissed because the writ petition was preferred on September 2, 2022 and Respondent No. 3 vide letter dated September 6, 2022 informed the Petitioner that the application for revocation of the cancellation of registration cannot be considered

Issue

Whether remedy of Appeal under Section 107 of the CGST Act can be availed even if remedy under Section 30 of the CGST Act is not exercised?

Held

The Hon’ble Karnataka High Court in Writ Petition No. 17778/ 2022 (T-RES) dated October 13, 2022held as under:

• Section 107 of the CGST Act indicates that a remedy of an Appeal before the Appellate Authority is available against the Order passed by the Respondent no 3 cancelling the GST Registration. Merely because the Petitioner has an option of seeking revocation of the cancellation under Section 30 of the CGST Act it cannot be said that independent of the said remedy of seeking revocation of cancellation, an Appeal would not be maintainable.
• The Hon’ble Court set aside the Order dated April 22, 2022 and directed the Respondent No. 3 to reconsider the Petitioner's request for the revocation of the cancellation of registration in light of the observations made in the Order, without reference to the communication issued to the Petitioner by the Respondent on September 6, 2022.
• The Hon’ble Court also asked the Respondent to reconsider the claim of the Petitioner and pass appropriate Order and /or take appropriate decision in accordance with law within a period of two weeks from the date of receipt of copy of the Order.