Gauhati High Court Permits Restoration of Cancelled GST Registration After Compliance

The Gauhati High Court recently held that GST registration cancelled for non-filing of returns can be restored where the assessee furnishes pending returns and expresses willingness to clear outstanding dues with applicable interest and penalty. Justice Kardak Ete disposed of the writ petition filed by Taba Raju and directed the authorities to consider the restoration of GST registration in accordance with the law.

The petitioner, carrying on business under the proprietorship concern M/S T. Tullong Enterprise, challenged the cancellation of GST Registration dated 19.02.2020 issued by the Superintendent, CGST, Naharlagun Zone-I, on the ground of non-filing of returns for a continuous period of six months. A show cause notice dated 24.12.2019 had earlier been issued under Section 29(2)(c) of the CGST Act, 2017. Since no reply was filed, the registration came to be cancelled.

Before the High Court, the petitioner submitted that the show cause notice was never received and therefore no response could be furnished. It was contended that there was no intention to evade tax, and the default occurred due to a lack of familiarity with GST portal procedures. The petitioner further stated that all pending returns had already been furnished and readiness was expressed to pay the entire tax dues along with applicable interest, late fees and penalties. “Cancellation of registration entails serious civil consequences.”

The petitioner relied upon earlier orders passed by coordinate benches of the Gauhati High Court in similar matters, including Yamang Siram vs. Union of India & Ors and Dug Rade vs. Union of India and Others, where relief was granted after considering the proviso to Rule 22(4) of the CGST Rules, 2017.

The Court observed that under the proviso to Rule 22(4) of the CGST Rules, proceedings for cancellation can be dropped if the assessee furnishes all pending returns and makes payment of tax dues along with applicable interest and late fee. The Bench also noted that cancellation of GST registration has adverse civil consequences and affects the ability of a person to carry on business lawfully. The Court pointed out that, “If a person is ready and willing to furnish all the pending returns and to make full payment of the tax dues along with applicable interest and late fee, the Proper Officer shall drop the proceedings.”

Taking note of the fact that similar issues had already been decided by the Court in earlier writ petitions, the High Court directed the petitioner to file an appropriate application before the respondent authorities within 20 days seeking restoration of GST registration.

Therefore, the Court directed the authorities to verify and consider the application in accordance with the law and restore the GST registration thereafter. The entire exercise was to be completed within four weeks from the date of receipt of the certified copy of the order.

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