Gauhati HC Allows GST Cancellation Revocation & Instalment Payment Under Section 80

GST Cancellation, Instalment Payment, and the recent Gauhati High Court judgment in N Chetia And Sons Trading And 2 Ors Vs State of Assam And 3 Ors have significant implications for businesses facing similar issues. The court’s decision provides a pathway for firms to regularize their compliance and pay outstanding liabilities in instalments under Section 80 of the CGST Act, 2017, while also addressing the issue of bank account attachment and GST registration cancellation.

Key Facts

• The Gauhati High Court disposed of a writ petition filed by a partnership firm challenging multiple actions taken by the Assam State GST authorities.
• The firm’s GST registration was cancelled in 2021 due to continuous non-filing of returns and non-payment of GST.
• The petitioners contended that they were willing to file pending returns and pay outstanding liabilities, seeking revocation of cancellation, defreezing of bank accounts, and permission to pay dues in instalments.
• The Court granted liberty to the petitioners to apply for revocation of GST registration cancellation, to file pending returns, and to seek payment of GST dues in instalments under Section 80 of the CGST Act, 2017.
• The bank accounts of the petitioners were to be defreezed upon filing such applications, subject to furnishing sufficient security under Rule 159(5) of the Assam GST Rules, 2017.
• Relevant sections and rules include Section 29(2) of the Assam GST Act, Section 80 of the CGST Act, 2017, and Rule 159(5) of the Assam GST Rules, 2017.

Statutory Context & Tax Analysis

The GST Act, 2017, and the Assam GST Act provide the framework for GST registration, return filing, payment of tax, and cancellation of registration. Section 29(2) of the Assam GST Act allows for the cancellation of GST registration in cases of continuous default. Section 80 of the CGST Act, 2017, permits the payment of tax dues in instalments. The Assam GST Rules, 2017, outline the procedures for defreezing bank accounts, including the requirement to furnish sufficient security under Rule 159(5). Understanding these provisions is crucial for businesses to navigate the complexities of GST compliance and to avail of the relief provided by the court’s judgment.

Client Impact & Compliance Procedure

Businesses facing GST registration cancellation and bank account attachment due to non-compliance can take the following steps:

1. Apply for Revocation of Cancellation: File an application for revocation of GST registration cancellation, providing grounds for such revocation and a commitment to comply with GST regulations.
2. File Pending Returns: Prepare and file all pending GST returns (GSTR-1 and GSTR-3B) to regularize compliance and calculate outstanding tax liabilities.
3. Apply for Instalment Payment: Under Section 80 of the CGST Act, 2017, apply for permission to pay outstanding GST dues in instalments, providing a payment plan and ensuring timely payments.
4. Furnish Security for Defreezing Bank Accounts: Comply with Rule 159(5) of the Assam GST Rules, 2017, by furnishing sufficient security to secure the payment of tax, interest, and penalty, if any, to facilitate the defreezing of bank accounts.
5. Maintain Records and Compliance: Ensure all GST-related records are up-to-date, and ongoing compliance is maintained to avoid future issues.
6. Seek Professional Advice: Consult with tax advisors to navigate the legal and procedural aspects of GST compliance and to ensure adherence to the court’s directives and GST laws.
   By following these steps and understanding the relevant sections of the GST Act and Rules, businesses can effectively manage GST compliance issues, including registration cancellation and bank account attachment, and benefit from the instalment payment facility to clear outstanding liabilities.

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