2026-VIL-323-GSTAT-HYD
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SGST Tribunal

GST - Revocation of cancellation of registration - Proviso to Rule 23(1) of the CGST Rules, 2017 - Payment of interest, late fee and penalty on returns filed for revocation – Respondent defaulted in furnishing returns for a continuous period of six months, and its registration was cancelled after an SCN - FAA revoked the cancellation, having noted that all returns were filed immediately after the SCN, and directed the proper officer to verify filing of returns and payment of tax - Appellant-Department contended that the FAA ignored the proviso to Rule 23(1) and did not ensure payment of interest, late fee and penalty - Whether the FAA was within its powers to allow the appeal without ensuring that interest, late fee and penalty were paid along with the tax for the relevant period - HELD - The liability arising from the returns extends to interest, late fee and penalty, which are substantive obligations integral to the correct adjudication of the dispute. The FAA approached the matter solely on verification of tax payment and filing of returns without any consideration of the proviso to Rule 23(1), which requires such amounts to be paid before revocation, and thereby committed a jurisdictional and substantive error - The intent of the FAA, though Rule 23 was not directly referred to, appears to be that the amounts indicated in that Rule were to be collected. As the Respondent had paid only the tax and filed the returns, the Appellant was at liberty to collect interest and late fee under Sections 50 and 47 of the Act. Since the amounts are admitted, the statutory machinery of Section 79 is available for their recovery. The Respondent is further liable for penalty under Rule 23, and a penalty is accordingly imposed - The order of the FAA is modified to this extent, the appeal of the Department is allowed
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