Assessee Entitled to Claim ITC for Period Between GST Registration Cancellation and Restoration

Introduction: The complexities of GST compliance often pose significant challenges for businesses. M/s R. K. Jewelers, a proprietorship firm, experienced one such challenge when its GST registration was canceled due to non-filing of returns. Despite appealing the decision, the firm faced continued hurdles until a new notification provided a potential pathway to relief.

Facts of the Case: M/s R. K. Jewelers had its GST registration canceled by the department due to non-compliance in filing returns. The firm initially appealed the decision with the Appellate Authority, but the appeal was rejected, and the cancellation was upheld. Determined to contest the ruling, the petitioner approached the Hon’ble Rajasthan High Court under writ jurisdiction.

During the pendency of the writ petition, a crucial development occurred. The GST authorities issued Notification No. 03/2023-CT on 31st March 2023, which allowed for the revocation of GST registration cancellations under specific conditions, particularly for those who had failed to file returns.

Judgment: The Hon’ble Rajasthan High Court ruled in favor of M/s R. K. Jewelers, granting the firm the right to apply for the restoration of its GST registration under the new notification. The Court emphasized that once the conditions of the notification are fulfilled, the firm is entitled to reclaim Input Tax Credit (ITC) for the period during which the registration was canceled.

The writ petition was disposed of, with the Court directing the petitioner to approach the competent authority for the prompt restoration of its GST registration, ensuring that the process aligns with the guidelines provided in the notification.

Conclusion: This case highlights the importance of keeping up with regulatory changes and understanding the avenues available for recourse. M/s R. K. Jewelers’ persistence paid off when the Rajasthan High Court recognized the firm’s right to reclaim ITC and restore its GST registration. This ruling serves as a reminder that businesses facing similar challenges should explore every legal option to protect their interests and ensure compliance.