Section 29 of the GST Act empowers the proper officer to suspend the registration during the pendency of proceedings relating to cancellation of registration

Kerla High Court Held Under Section 29 of the GST Act empowers the proper officer to suspend the registration during the pendency of proceedings relating to cancellation of registration

Issue

Petition before the Kerala HC filed by the Petitioner to set aside Ext.P3 notice and permit the petitioner to remit the arrears of tax within a time frame fixed by this Hon’ble Court.

Facts

• Petitioner stated that he was regularly paying tax and in the last year but, because of Covid-19 pandemic, his business collapsed. According to the learned counsel for the petitioner, the petitioner is even now, ready and willing to file all returns and to pay tax which is due and payable by them.
• The petitioner’s establishment came to be registered on 04/07/2020 and accordingly registration certificate, Ext.P1 came to be issued in its Favour.
• On 11/02/2021, a notice in Form GST REG-17/31 came to be issued to the petitioner asking it to show-cause as to why its registration should not be canceled. The show-cause notice mentions the reason for intended cancellation of registration as “any tax payer other than composition tax payer has not filed returns for a continuous period of six months”.
• The petitioner is directed by this show-cause notice to furnish the reply within 30 days and to appear before the proper officer on 26.03.2021. In the interregnum, registration of the petitioner is suspended by the proper officer.

Findings

In this Case the registered persons fail to file returns for a continuous period of six months, the proper officer can cancel the registration, but that has to be done by granting opportunity of hearing to the registered person. Rule 22 of the GST and ST Rules 2017 deals with procedure for cancellation of registration and as per requirement of this Rule, the registered person is required to be issued with a show-cause notice requiring him to show-cause as to why the registration shall not be canceled.

Section 29 of the GST Act empowers the proper officer to suspend the registration during the pendency of proceedings relating to cancellation of registration.

Judgement

Kerala HC dismissed the petition by stating that petitioner is permitted to approach the proper officer for preponement of date of hearing by submitting his reply to the show-cause notice. If such request is made by the petitioner, the proper Officer shall consider the same and shall decide the proceedings expeditiously. If the petitioner cooperates with the proper Officer, it is expected of the proper Officer to dispose of the proceedings for show-cause notice of cancellation within a period of three weeks from the date of appearance of the petitioner.

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