HC: Department cannot demand additional documents other than those prescribed w.r.t GST registration application

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Synopsis: The Hon’ble High Court of Kerala in the case of State of Kerala v. West Bengal Lottery Stockists Syndicate (P.) Ltd. has directed the authority to consider application for registration without the additional documents mentioned in the notice.

Facts:

M/s West Bengal Lottery Stockists Syndicate Private Limited (“the assessee”), deals in lottery tickets and applied online for registration under Rule 8 of the CGST Rules, 2017 (“CGST Rules”) on January 16, 2019.

The assessee received a notice dated January 31, 2019, from the State Tax Officer seeking additional information as follows:

“1. Documents to prove the ownership of the business premises and Bank details of the directors are not uploaded.

  1. As per your application for registration you intend (ing) to deal Lottery Services. But documents to prove that you are authorized to deal the lottery services under the following provisions are not furnished. 1) The Lotteries (Regulation) Act, 1998. (2) The Lotteries (Regulation) Rules, 2010. (3) Kerala Paper Lotteries (Regulation) Rules, 2005. (4) Kerala Paper Lotteries (Regulation) Amendment Rules, 2018. (5) Direction u/s. 10 of the Lotteries (Regulation) Act, 1998 vide FNO/17013/2/2011 CSR-I dated 2nd August 2011 by Joint Secretary to Govt. of India, Ministry of Home Affairs.”

Thereafter, the assessee received an order dated February 2, 2019, rejecting the application for registration. Aggrieved by the order the assessee filed the writ petition.

The Single Judge of the High Court disposed of the writ petition stating that the matter shall be reconsidered by the Competent Authority dehors any reasons as stated in the impugned order dated February 2, 2019 and a fresh decision shall be taken in accordance with the GST Act and Rules on submitting a fresh application by the assessee. Assailing the judgment of the learned Single Judge, the State and its officials have filed this appeal.

Issue involved:

The appeal involves interpretation of Rule 9(2) of the CGST Rules regarding furnishing of clarification, information, and documents in relation to an application for registration made under Section 25 of the CGST Act, 2017 (“CGST Act”).

Held:

The Hon’ble High Court, Kerala observed Rule 9(2) of the CGST Rules and in W.A. No. 1228 of 2019 dated July  19, 2019, held as under:

  • The officer concerned is empowered under Rule 9(2) of CGST Rules to issue notice to a person who has filed application for registration under Rule 8 of CGST Rules to furnish clarification with regard to any information provided in that application or documents furnished therewith.
  • Such clarification may include information to ascertain the legality of the business proposed to be conducted by the applicant, but it does not include furnishing of any documents other than the documents required to be uploaded under Rule 8(4) of CGST Rules.
  • The court directed the assessee to file an application afresh which shall be considered by the Revenue dehors the documents mentioned under item number (ii) of the notice dated January 31, 2019.
  • However, on verification of such application, if it is found to be deficient in terms of any document required to be furnished under Rule 8(4) of the CGST Rules, the proper officer is entitled to require the assessee to furnish such document.
  • The authority concerned is also entitled to seek clarification with regard to any information provided in the application or documents furnished therewith. But such clarification shall not be required to be furnished in the form of any document.

Citation: [2019] 108 taxmann.com 286 (Kerala)

Relevant provision:

Rule 9 (2) of CGST Rules:

“(2) Where the application submitted under rule 8 is found to be deficient, either in terms of any information or any document required to be furnished under the said rule, or where the proper officer requires any clarification with regard to any information provided in the application or documents furnished therewith, he may issue a notice to the applicant electronically in FORM GST REG-03 within a period of three working days from the date of submission of the application and the applicant shall furnish such clarification, information or documents electronically, in FORM GST REG-04, within a period of seven working days from the date of the receipt of such notice.

Explanation- For the purposes of this sub-rule, the expression “clarification” includes modification or correction of particulars declared in the application for registration, other than Permanent Account Number, State, mobile number and e-mail address declared in Part A of FORM GST REG-01.”