This appeal has been filed under Section 107 of the Central Goods and Service Tax Act, 2017 (hereinafter referred to as the “Act”) by Sh. Kana Ram Raiger (M/s Sagar Enterprises),D-61, Phase-III, Jhalana Dungri, Malviya Nagar, Jaipur-302017 (hereinafter also referred to as the “appellant”) against the Order No.ZA081120039652W dated 18.11.2020 (hereinafter referred to as the “impugned order”) passed by the Assistant Commissioner, Central Goods and Service Tax Division-E, Jaipur (hereinafter referred to as “the adjudicating authority/Proper Officer”).

Brief facts of the case:

2. Brief facts of the case are that the Proper Officer has cancelled the GSTIN of Sh. Kana Ram Raiger (M/s Sagar Enterprises), D-61, Phase-III, Jhalana Dungri, Malviya Nagar, Jaipur-302017 having GSTIN 08AJFPR8174C1ZZ due to non filing of returns for a continuous period of six months. The application for revocation of cancellation of registration has been also rejected due to non submission of reply to the show cause notice reference No.ZA081020294128Q dated 14.10.2020 within the time specified therein.

3. Being aggrieved with the impugned order, the appellant has filed the appeal against the said order stating therein that additional requirement was raised by you regarding interest on tax paid thereon. It is submitted that there are no any tax paid in cash w.e.f August-2017 to till date as Input Tax Credit higher than output tax liability i.e. Input Tax Credit to set off the output liability were available in the same month of consideration. Hence no any interest liability as per press release dated 22th December 2018 issued by the Ministry of Finance. Further, It is also submitted that I am liable to pay all the liabilities on account of interest payable for the relevant period if raised by the department in future. The appellant further stated that many of the returns are pending and to be filed at portal and due to registration not yet activated, we are unable to file the same. In result unnecessary penalties/late fees to be payable by us

4. Personal hearing in virtual mode through video conference was held on 10.03.2021. Shri Gopal Krishan Vijay, Authorized Representative appeared for personal hearing on behalf of the appellant. He reiterated the grounds of appeal during personal hearing and explained the same during personal hearing. Further, he submitted that the returns of the appellant till cancellation of registration have been filed and all tax, penalty, late fee and interest have also been deposited. In view of above submission he requested for revocation of registration.

5. I have gone through the facts of the case and the written submissions made by the appellant in their appeal memo as well as also oral submission at the time of personal hearing and accordingly I proceeded for deciding the appeal.

6. I find that the adjudicating authority/proper officer has rejected the application for revocation of cancellation of registration through Form GST REG-05 as appellant did not file the reply to the notice issued vide show cause notice reference No. ZA081020294128Q dated 14.10.2020 within the time specified therein.

7. In this context, the appellant submitted in their written submission that there are no any tax paid in cash w.e.f. August-2017 to till cancellation of registration as Input Tax Credit higher than output tax liability i.e. ITC to set off the output liability were available. Hence no any interest liability as per press release dated 22th December,2018 issued by the Ministry of Finance. Further he has also submitted that he is liable to pay all the liabilities on account of interest payable for the relevant period if raised in future.

8. In this regard, the relevant provisions are as under:-

Rule 23 of the CGST Rules, 2017 regarding revocation of cancellation of registration provides as under:-

(1) A registered person, whose registration is cancelled by the proper officer on his own motion, may submit an application for revocation of cancellation of registration, in FORM GST REG-21*, to such proper officer, within a period of thirty days from the date of the service of the order of cancellation of registration at the common portal, either directly or through a Facilitation Centre notified by the Commissioner :

Provided that no application for revocation shall be filed, if the registration has been cancelled for the failure of the registered person to furnish returns, unless such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.

[Provided further that all returns due for the period from the date of the order of cancellation of registration till the date of the order of revocation of cancellation of registration shall be furnished by the said person within a period of thirty days from the date of order of revocation of cancellation of registration :

Provided also that where the registration has been cancelled with retrospective effect, the registered person shall furnish all returns relating to period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration within a period of thirty days from the date of order of revocation of cancellation of registration.]

(2) (a) Where the proper officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation of registration by an order in FORM GST REG-22* within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.

(b) The proper officer may, for reasons to be recorded in writing, under circumstances other than those specified in clause (a), by an order in FORM GST REG-05*, reject the application for revocation of cancellation of registration and communicate the same to the applicant.

(3) The proper officer shall, before passing the order referred to in clause (b) of sub-rule (2), issue a notice in FORM GST REG-23* requiring the applicant to show cause as to why the application submitted for revocation under sub-rule (1) should not be rejected and the applicant shall furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24*.

(4) Upon receipt of the information or clarification in FORM GST REG-24*, the proper officer shall proceed to dispose of the application in the manner specified in sub-rule (2) within a period of thirty days from the date of the receipt of such information or clarification from the applicant.

9. Further, I find that Central Board of Indirect Taxes & Customs, New Delhi has clarified the issue vide circular No.99/18/2019-GST dated 23.04.2019. Para 3 of said circular read as under:

3.“ First proviso to sub-rule (1) of the said Rules provides if the registration has been cancelled on account of failure of the registered person to furnish returns, no application for revocation of cancellation of registration shall be filed, unless such returns are furnished and any amount in terms of such returns is paid. Thus, where the registration has been cancelled with effect from the date of order of cancellation of registration, all returns due till the date of such cancellation are required to be furnished before the application for revocation can be filed. Further, in such cases, in terms of the second proviso to sub-rule (1) of rule 23 of the said Rules, all returns required to be furnished in respect of the period from the date of order of cancellation till the date of order of revocation of cancellation of registration have to be furnished within a period of thirty days from the date of the order of revocation.”

The relevant provision of Notification No.63/2020-C.T., dated 25.08.2020 is as under:

Interest on delayed payment of duty- Provision of Section 100 of Finance (No.2) Act, 2019 amending Section 50 of CGST Act, 2017 come into force from 01.09.2020

In exercise of the power conferred by sub Section (2) of Section 1 of the Finance (No.2) Act, 2019 (23 of 2019), the Central Government hereby appoints the Ist day of September, 2020, as the date on which the provisions of Section 100 of the Finance (No.2) Act, 2019 (23 of 2019), shall come into force.

Further as per Section 50 of CGST Act, 2017-

1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council :

[Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.]

10. On going through the submission of the appellant I observed that the appellant did not discharge their total interest liability rather he stated that since he had not paid any tax liability through cash hence no any interest liability arised as per press note released on 22nd December 2018. However, in this context I find that in terms of proviso of Section 50 of CGST Act, 2017 amended vide Notification No.63/2020- C.T dated 25.08.2020 interest liability on net tax has been considered on prospective date i.e. with effect from 1st Sept 2020. Therefore, I find that the appellant has not been complied with the first proviso of Rule 23 of CGST Rules, 2017. Hence, in view of this I am the opinion that the cancellation of registration of appellant may not be considered for revocation. Accordingly, I reject the appeal of the appellant.

11. Accordingly, the appeal is disposed off in above manner.