GST Cancellation Not Final: High Court allows GSTN Revival on filing of outstanding Returns

The petitioner’s GST registration was cancelled under Section 29(2)(c) of the CGST Act, 2017, due to non-filing of returns for over six months. A show cause notice had been issued in July 2021, but the petitioner failed to reply to it. He later explained the lapse by pointing to personal illness and disruptions caused by COVID-19. Having missed the statutory window for filing a revocation or appeal under the CGST framework, the petitioner directly approached the High Court seeking restoration of his cancelled GST registration to resume business operations.

Issue Raised: If the taxpayer later complies with return-filing and tax payment requirements, can the GST registration be reinstated after cancellation, even after the revocation period has passed?

HC’s Decision: The High Court took up the matter and held that if the taxpayer agrees to regularise previous defaults, the GST registration cancellation is not final and absolute. According to Rule 22(4) of the CGST Rules, if the assessee files all outstanding returns and pays all outstanding tax, interest, and late fees, the appropriate officer may end the cancellation process. The Court underlined that even in cases where the taxpayer did not initially reply to the show cause notice, the proviso to Rule 22(4) allows for such restoration. Recognizing the civil consequences of cancellation, such as loss of business opportunities and disqualification from tenders, the Court directed that upon full compliance by the petitioner, the authorities must consider restoration and issue an order in Form GST REG-20.

The High Court confirmed that meeting tax obligations can take precedence over revocation timeline procedural errors. This ruling guarantees that legitimate taxpayers won’t be excluded from a second opportunity based only on technicalities.

To Read Order, Download PDF Given Below