Facts: The petitioner, Kishore Nichani, sought restoration of his Goods and Services Tax (GST) registration, which was cancelled due to failure to file returns for more than six months. Despite the cancellation, the petitioner cleared all tax dues, interest, and penalties. The petitioner's application for revocation of cancellation was not acted upon by the respondents.
Procedural Posture: The petitioner filed a writ petition under Article 226 of the Constitution of India in the High Court of Judicature at Bombay, seeking a writ of mandamus to direct the respondents to restore his GST registration.
Issue: Whether the GST authorities are obligated to restore the GST registration of a petitioner after all tax liabilities have been cleared, and whether the failure to provide an opportunity of being heard before cancellation of registration renders the action void?
Holding: Yes, the High Court held that the GST authorities are obligated to restore the petitioner's GST registration, and the writ petition was allowed in terms of prayer clause (b), directing the restoration of the registration. The rule was made absolute.
Reasoning: The Court reasoned that Section 30 of the CGST Act, 2017 read with Rule 23 of the CGST Rules, 2017, authorizes the revocation of cancellation of registration when the assessee fulfills the requisite conditions. The Court emphasized that the cancellation of registration has civil consequences and that the second proviso to Section 29 mandates that an opportunity of being heard must be given before cancellation. Failure to adhere to this proviso renders the action void ab initio. The Court also noted that keeping the registration cancelled despite the clearance of all dues does not benefit the Revenue and prejudices the petitioner. The Court relied on previous decisions, including Azaria Corp LLP Vs. The Deputy Commissioner of State Tax, which held that restoration of registration benefits both the assessee and the Revenue.