The Gauhati High Court directed the GST authorities to consider restoration of a cancelled GST registration after observing that a taxpayer who clears pending compliances and dues should be given an opportunity to seek revocation in terms of Rule 22(4) of the CGST Rules, 2017. Justice Kardak Ete disposed of the writ petition filed by Super Traders, whose GST registration had been cancelled for non-filing of returns.

The petitioner, a partnership firm engaged in the business of trading uniforms and furniture, challenged the order dated 02.05.2023 cancelling its GST registration. The cancellation was preceded by a show-cause notice issued on 09.11.2022 alleging failure to file GST returns for a continuous period of six months, following which the registration was also suspended.

Before the High Court, the petitioner submitted that the default occurred due to the prolonged illness of the mother of its managing partner, who had to remain away from business activities for medical treatment. It was argued that the firm could not properly manage its affairs during that period, resulting in non-filing of returns. The petitioner further stated that although it intended to seek revocation of the cancellation, the statutory time limit for filing such an application had already expired. It was also pointed out that all pending GST returns up to June 2023 had since been filed and the petitioner was willing to comply with all remaining statutory requirements.

The petitioner relied upon an earlier Gauhati High Court decision in Dhirghat Hardware Stores, where similar relief had been granted in comparable circumstances. The GST Department fairly conceded that the facts and legal issues involved in the present case were substantially similar to those considered in the earlier judgment.

“If a person is ready and willing to furnish all the pending returns and to make full payment of the tax along with applicable interest and late fee, the officer can drop the proceedings and pass an order in Form GST REG-20.”

The High Court examined the provisions of Section 29(2)(c) of the CGST Act and Rule 22 of the CGST Rules, which govern cancellation of registration for non-filing of returns. The Court noted that the proviso to Rule 22(4) specifically contemplates a situation where a taxpayer furnishes all pending returns and clears outstanding tax, interest and late fees, enabling the proper officer to drop cancellation proceedings.

Observing that cancellation of GST registration carries serious civil consequences and that the issue was squarely covered by the earlier decision of the Court, the Bench held that the petitioner deserved similar relief.

Thus, the Court permitted the petitioner to approach the concerned GST authority within 60 days seeking restoration of its GST registration. It directed that if the petitioner complies with the requirements prescribed under Rule 22(4), including payment of tax, penalty, interest and late fees, the authorities shall consider the request for restoration in accordance with law and take appropriate steps expeditiously. The writ petition was disposed of with these directions.