GST Update No 324 on cancellation of registration due to inadvertent mistake

The litigation as regards cancellation and restoration of GST registration has increased manifold either due to negligence on the part of assessee or due to exercise of power of cancellation of GST registration due to non-filing of returns for continuous period of 6 months. In either ways, there is inconvenience to the assessee as their business operations are being put to hault and to the department as there is loss of revenue to the government exchequer. Time and again the assessee have to knock the doors of Courts to seek relief regarding restoration of their GST registration. Recently, one more case on similar subject matter was reported before hon’ble Madras High Court in the case of M/S S.S.G. APPARELS V/S THE DEPUTY ASSISTANT COMMISSIONER. The decision imparted in this case is subject matter of discussion of our present update.he petitioner challenged the registration cancellation order dated 30.09.2020. It was stated that while filing application for the GST registration, the factory address of the petitioner was included twice under the column “additional place of business in the state”. The petitioner wishes to rectify the same and therefore, submitted an application for amendment of registration certificate. However, while filing the online application, the accountant mistakenly selected “cancellation” from drop down menu instead of “modification”. Therefore, the cancellation order was passed w.e.f. 01.05.2020. The counsel of respondent submitted that cancellation of registration was effected on request of petitioner and the petitioner himself is seeking revocation of the same in terms of availability of revisional remedies. Further, the submission of petitioner as regards to inadvertent mistake was not considered.The Court in the interest of substantial justice held that, the explanation and submissions of the petitioner needs to be considered. It was stated that request for cancellation was an inadvertent error. The order was therefore, set aside and application for restoration of registration of the petitioner was accepted. It was directed to correct the details of principal and additional place of business. Further, since the petitioner was not awarded with facility of online filing of application regarding cancellation of registration, it was permitted to file the application manually. The revenue was directed to restore the registration within 2 weeks from date of receipt of application. The above decision is one more example wherein the liberal approach adopted by the Courts is highlighted. The revenue authorities should realise the importance of the fact that the registration of the assessee should not be cancelled on arbitrary and flimsy grounds or merely because of inadvertent mistakes which consequently, results into hampering of business operations of the assessee. One more decision on similar lines was reported before Gujarat High Court in the case of M/S DILIPKUMAR CHANDULAL wherein the cancelled GST registration due to inadvertent mistake of CA was restored . The revenue department should take into consideration judicial rulings like these before taking action regarding cancellation of GST registration.

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GST Update No 324 on cancellation of registration due to inadvertent mistake

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