Sahayta Security Services Pvt Ltd Vs AC(ST), Mandi, HP

1. At the outset, it is made clear that the provisions of both the Himachal Pradesh Goods and Service Tax Act, 2017 and Central Goods & Service Act, 2017 (hereinafter referred to as HPGST and CGST Act respectively) are the same. A reference to the 1-IPGST Act would also mean a reference to the corresponding similar provisions under the CGST Act.

2. The present appeal has been tiled under Section 107 of HPGST/CGST Act 2017 against the order dated 15.03.2021 issued by’ the Assistant Commissioner State Taxes & Excise-cum-Proper Officer Mandi Circle-III Mandi HP, whereby the Proper Officer (Respondent) has cancelled GSTIN of the appellant for non-depositing of interest for three consecutive months under the Acts ibid.

3. The brief facts in the matter are that the appellant M/s Sahatya Security Services Private Limited Sahatya House Hospital Road Mandi Himachal Pradesh 175001, GSTIN-02AALCS1348HIZI is engaged in providing security services to various institutes and corporate offices. The registration of the appellant was cancelled on account of non deposit of interest amount for more than three months. The appellant was issued notice to deposit the interest amount under CGST/HPGST Act ibid, However he failed to deposit interest within the stipulated period. The GSTIN of the appellant was, consequently, cancelled by the Proper Officer vide order dated 15-03-2021.

4. Felt aggrieved therefore appellant filed, appeal under section 107 on GST Portal on 05-08-2021. Notice of personal hearing in the matter was issued on 10-08-2021 to appear on 17-08-2021 before undersigned.

5. In his grounds of appeal and arguments, the appellant submitted that the respondent vide order dated 01-12-2020 created a demand for year 2017-18,2018-19 & 2019-20 amounting to Rs 07,71,867/- on account of tax/ interest. The appellant has filed appeals under section 107 of CGST/HPGST Act 2017 against these three orders on dated 12-­03-2021 which has been duly admitted by the Appellate Authority HP. ………………………………………………. minimum conditional amount under section 107(6) of CGST/HPGST Act 2017. Despite filing appeals, against the order issued by the proper officer, Respondent cancelled the registration of the appellant for failure to deposit the balance demand. The action of the proper officer is against the provision of the CGST/HPGST enactments. Section 107(7) of CGST/HPGST Act 2017 provides deemed stay of recovery proceedings for the balance amount in the event of the filing of the appeal., so , there remains no cause for cancellation of registration and the same may kindly be revoked.

6 Replying to the above contentions of the appellant, Sh Ramesh Chauhan ACST&E-cum-Proper Officer Mandi Circle-III Mandi submitted that the M/s Shayta Security Services Pvt. Ltd. Hospital  Road Mandi having GSTIN 02AALCS1348H1ZI has filed appeal against the order of cancellation of registration dated 15.03.2021 under CGST/HPGST Act, 2017. It was on account of failure to pay interest on late deposited tax pertaining to tax period from 01-7-2017 to 31-12­-2019 amounting to Rs 07,71,867/- out of which 01,36,469/-has been deposited .The appellant did not make the payment within 90 days. Therefore the proper officer has to resort to recovery process as provided under GST law and resultantly cancelled the GSTIN of the appellant as per provisions of Section 29(2)(a) of the GST Act, 2017. After the appeal submitted/admitted the proper officer has not issued any notice for recovery of balance amount of demand as it was taken as stayed as provided under section 107(7) of GST Act, 2017. The proper officer has issued show cause notice in form of GST REG-17/31 notice no. ZA020321001219F dated 03.03.2021 and the interest amount was conveyed to the appellant through previous notices under section 169(1)(d) in form of DCR-01A, DCR-01 and DCR-07. The proper officer has submitted that he has resorted no coercive action for recovery of demand. The factual passion as on date is that the appellant is liable to pay Rs 6,36,3981-of due amount of interest. Therefore, submission in the case is forwarded for your consideration please.

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7 I have heard both the parties in the matter. After going through the facts of the case and arguments put forward by the above contending parties, it is clear that the GSTIN of the appellant was cancelled as per provisions of Section 29(2)(a) the GST Act, 2017 on account of failure of non payment of interest amount for the period 01-07-2017 to 31-12-2019. section 29(2) which is reproduced as under:

29(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,-

(a)a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed, or

(b) a person paying tax under Section 10 has not furnished returns for three consecutive tax period, or

(c) any registered person, other than a person specified in clause (b), has not furnished return for a continuous period of six months, or

(d) any person who has taken voluntary registration under sub section (3) of section 25 has not commenced business within six months from the date of registration, or

(e) registration has been obtained by means of fraud. wilful misstatement or suppression of facts.

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

So. as per section 29(2) of the CGST/HPGST Act 2017. there should he contravention of provisions Of the Act. However in the present case the appellant has tiled appeals under section 107 of CGST HPGST Act 2017 on dated 12-03-2021 against  the order issued by the proper officer in which said demand in form of tax interest \s–as created for the period from 01-7-2017 to 31-12-2019 amounting to Rs 07.71.867/-The appellant has deposited required amount under section 107(6) of CGST/HPGST Act 201: amounting to Rs 01,36,469/- Section 107(7) provides that “there the appellant had paid the amount under sub­section 6 the recovery proceeding for the balance amount shall be deemed to be stayed”. In the present case the appellant has deposited more than 10% of the disputed tax amount. Also the interest amount is pan of the order against which appeal has been tiled by the appellant. Therefore. there is no contravention of the provision under section 29(2)(a) of CGST/HPGST Act 2017 for initiation of proceedings under the section.

8 The fact that these appeals have been acknowledged/admitted by the undersigned. has been ignored the respondent. Since the matter is subjudice before the undersigned. therefore recovery proceeding could not be initiated against the appellant. Keeping in view the facts of the case I do. hereby. order the revocation of cancellation of M/s Sahatya Security Services Private Limited. Sahatya House Hospital Road Mandi Himachal Pradesh-175001,GSTIN-02AALCS1348HIZI with immediate effect.