The Gauhati High Court has held that the Goods and Service Tax (GST) registration cancellation notice can be withdrawn if dues are cleared.
The bench of Justice Sanjay Kumar Medhi has observed that the proviso to sub-rule (4) of Rule 22 of the CGST Rules 2017 states that if a person, who has been served with a show cause notice under Section 29(2)(c) of the CGST Act, 2017, is ready and willing to furnish all the pending returns and to make full payment of the tax itself along with applicable interest and late fee, the officer, duly empowered, can drop the proceedings and pass an order in the prescribed Form i.e. Form GST REG-20.
The petitioner/assessee is carrying out his proprietorship business under the name & style, “M/s Aruhan Enterprise” as the sole proprietor. She is an Assesee registered under the Central Goods and Services Tax (CGST) Act, 2017/Assam Goods and Services Tax (AGST) Act, 2017.
On the reason of non-filing of GST returns for a continuous period of six months, the petitioner was served with a show cause notice asking him to furnish reply to the aforesaid notice within a period of 30 (thirty) days from the date of service of notice and it was mentioned in the show cause notice that if the petitioner fails to furnish a reply within the stipulated date or fails to appear for personal hearing on the appointed date and time, the case will be decided ex-parte on the basis of the available records. The order was passed by the Assistant Commissioner of State Tax by which the petitioner’s GST registration has been cancelled for not furnishing returns for a continuous period of 6 or more months.
The petitioner contended that due to non-conversant of online procedure, she could not visit the GST portal and accordingly could not submit any reply to the said show cause notice in time. It is further contended that when the petitioner came across the notice, the time for filing reply and attending the hearing was already over and order had also been uploaded in the portal.
The petitioner further contends that after recovering from impact of Covid-19, she updated all her pending returns up to the month of May, 2023 as allowed by the GST portal and while updating her returns, the petitioner has also discharged all her GST dues along with his late fees and interest.
The petitioner tried to file the necessary application seeking revocation of GST cancellation, however, the same could not be filed as the time limit prescribed for filing of revocation application was elapsed and a message was displayed in the screen “timeline of 270 days from the date of cancellation order provided to taxpayer to file application for revocation of cancellation is expired.” Petitioner also preferred appeal and the same was dismissed vide order dated 08.11.2023.
As per Section 29(2)(c) of the CGST Act, an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for a continuous period of 6 (six) months. Rule 22 of the CGST Rules, 2017 has laid down the procedure for cancellation of the registration.
The court noted that the GST registration of the petitioner has been cancelled under Section 29(2)(c) of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 (six) months or more and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences. Therefore, in the event the petitioner approaches the officer, duly empowered, by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, has the authority and jurisdiction to drop the proceedings and pass an order.
The court disposed of the writ petition by providing that the petitioner shall approach the concerned authority within a period of 2 months seeking restoration of her GST registration. If the petitioner submits an application and complies with all the requirements as provided in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, the concerned authority shall consider the application of the petitioner for restoration of the GST registration and passed necessary orders in accordance with law.
Case Details
Case Title: Shahima Khatun Versus The State Of Assam And 3 Ors.
Case No.: WP(C)/3300/2025
Date: 20/06/2025
Counsel For Petitioner: A K Gupta
Counsel For Respondent: SC, Finance And Taxation
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