The Gauhati High Court has held that a taxpayer whose GST registration was cancelled for non-filing of returns for six months or more can seek restoration by furnishing all pending returns and paying the outstanding tax, interest and late fees.
The bench of Justice N. Unni Krishnan Nair observed that the statutory mechanism under Rule 22(4) of the Central Goods and Services Tax Rules, 2017 empowers the concerned officer to drop cancellation proceedings when the taxpayer complies with these requirements.
The petitioner was registered under the CGST Act, 2017 and the Arunachal Pradesh GST Act, 2017. His GST registration was cancelled after he failed to furnish GST returns continuously for six months.
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The petitioner was served with a Show Cause Notice dated April 16, 2025, requiring him to explain why his GST registration should not be cancelled. The notice warned that failure to submit a reply or appear for personal hearing would result in the matter being decided ex parte on the basis of available records.
As the petitioner did not respond within the prescribed period, the GST authorities subsequently passed an order dated May 30, 2025, cancelling his registration on the ground that GST returns had not been filed for six months or more.
The petitioner explained before the High Court that he was not conversant with the online GST procedure and therefore could not access the GST portal and respond to the notice within time. He stated that he became aware of the cancellation only after encountering difficulties in carrying on his business and making enquiries with his tax consultant. By then, both the response period and personal hearing date had expired and the cancellation order had already been uploaded on the portal.
After learning about the cancellation, the petitioner updated his pending GST returns up to March 2025 through the GST portal. He also paid the outstanding GST dues together with applicable interest and late fees.
However, when he subsequently attempted to file an application for revocation of the cancellation, the portal did not permit him to do so because the prescribed period had already expired. The portal displayed a message stating that the 270-day period available to the taxpayer for filing the revocation application from the date of the cancellation order had expired.
The petitioner therefore approached the High Court, stating that he was ready and willing to comply with the requirements prescribed under the proviso to Rule 22(4) of the CGST Rules.
The High Court examined Section 29(2)(c) of the CGST Act, which permits cancellation of registration where a registered person has failed to furnish returns for a continuous period of six months.
The Court also considered Rule 22 of the CGST Rules, which prescribes the procedure for cancellation. Under Rule 22(1), where the proper officer has reasons to believe that registration is liable to be cancelled, a notice in Form GST REG-17 is required to be issued calling upon the taxpayer to show cause.
Significantly, Rule 22(4) contains a specific proviso dealing with cases involving non-filing of returns. The proviso states that where, instead of replying to the cancellation notice, the taxpayer furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in Form GST REG-20.
The Court emphasised that the proviso to Rule 22(4) provides a specific statutory mechanism for a taxpayer who has failed to file returns but subsequently regularises the default.
According to the Court, where a taxpayer served with a cancellation notice under Section 29(2)(c) is ready to furnish all pending returns and make full payment of tax along with applicable interest and late fee, the empowered officer has the authority and jurisdiction to drop the cancellation proceedings and issue the prescribed Form GST REG-20.
The Court also took note of two earlier orders referred to by the parties—one dated March 11, 2025, in W.P.(C) No. 2244/2024 and another dated July 24, 2025, in Jinny Daimary v. State of Assam & Ors.—where similarly situated taxpayers had approached the Court.
A key consideration for the High Court was that cancellation of GST registration carries serious civil consequences for a taxpayer.
The Court noted that the petitioner’s registration had been cancelled specifically under Section 29(2)(c) because of non-filing of returns for six months or more. Since the statutory proviso to Rule 22(4) expressly provides an avenue for regularising such default by filing pending returns and paying the dues, the Court considered it appropriate to provide the petitioner an opportunity to approach the competent authority.
The High Court disposed of the writ petition by permitting the petitioner to approach the concerned authority within two months seeking restoration of his GST registration.
The Court directed that if the petitioner submits the application and fulfils all requirements under the proviso to Rule 22(4), the competent authority must consider the request for restoration and pass an appropriate order in accordance with law.
The Court further directed that the entire exercise should be completed expeditiously, preferably within an outer limit of 60 days from receipt of a certified copy of the order.
While granting the opportunity for restoration, the High Court made it clear that the petitioner would continue to be liable for payment of arrears, including tax, penalty, interest and late fees.
The Court also directed that the period stipulated under Section 73(10) of the CGST/SGST Acts would be computed from the date of the High Court’s order, subject to the specific treatment prescribed for financial year 2025-26 under Section 44.
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