3.3 Taxable person not holding registration on date of notice

Para 2.10

NOTICES UNDER SECTIONS 25 & 29

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formed basis for proposal to cancellation registration. And where the response and attendant redressal of all outstanding delinquencies (as mentioned in the notice) are found to be satisfactory, cancellation will be dropped by an Order in REG20. However, if the response is not satisfactory, Proper Officer is permitted to proceed with cancellation and pass a Speaking Order in REG19 and demand all dues, which extend to: (a) outstanding tax, interest, late fee and penalties due; (b) due under section 29(5) in respect of credits. Very often liability under section 29(5) is lost sight of when registration is cancelled. Cancellation also entails responsibility to file final returns under section 45 within three (3) months. While these are matters to be considered by taxpayers for purposes of present deliberations, it would suffice to invite attention to these outstanding liabilities. Speaking Order in REG19 too, may omit demanding all these dues. Taxpayer’s liability on account of any of these omissions or incompleteness of demand in REG19, does not eclipse taxpayer’s liability under, say, section 29(5). The forethought in securing recovery action is evident in section 93(1) which permits recovery even from taxpayer’s estate. And even more insightful is the provision to take up determination of liability, if any, permitted long after cancellation (or even demise of taxpayer), subject only to limitation in section 74, as expressly provided in section 29(3). Cancellation does not bring down the curtains on taxpayer’s engagement with this law. Taxpayers must consider proper winding down of registration in order to be really free from liabilities coming to light later and where limitation to seek redressal by way of rectification or even appeal, may have passed.

2.10 REVOCATION OF CANCELLATION

Not even cancellation is ‘final’ because section 30 and rule 23 provide a mechanism for ‘revocation’ of cancelled registration. Real finality will come when the time limit permitted for revocation passes. However, it is noticed that taxpayer’s appeals for restoration of registration are being entertained on equitable considerations, especially citing SMWP 3/2020 of Apex Court read with notifications issued under section 168A (discussed later).

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REVOCATION OF CANCELLATION

Para 2.10

Where registration is cancelled by issuance of REG19, Proper Officer is empowered to consider application for revocation of cancellation. Although this ‘review’ appears to touch the line of violating the rule nemo judex in causa sua (discussed earlier), this power of review is express in the law (section 30) and the same is to allow relief to taxpayer, this question is unlikely to come up for consideration before Courts. Adverse outcome in violation of natural justice alone come up for consideration before Courts. Application for revocation (of cancellation) is quite straightforward and does not require elaborate pleadings as the essence of the pleading is evident in the title of the prescribed form - application for revocation of cancelled registration - to be filed. However, the justification to allow this application is important. Again here, emotional pleas for justice in view of loss of livelihood are unnecessary. Unless outstanding dues are only those that are ‘disputed and unpaid’ and outstanding compliances have been attended, a short statement would do that “said registration is still required in view of intention to continue said business”. No elaborate explanation will be required. And when it clearly shown that: (a) REG21 is filed within time limit prescribed; (b) all outstanding and undisputed dues have been discharged; and (c) declaration that said registration is required is stated in REG24. There would be no reason to turn down application for revocation. Proper Officer may be in a position to verify compliances online and be satisfied that application is liable to be allowed by Order in REG22. If not satisfied, Proper Officer is required to issue notice in REG23 indicating proposal to deny the request made in the application. At this time, detailed justification will become necessary, keeping in mind the possibility that any rejection of application may need to be carried in appeal and at that time the question