GST Registration Cancelled For Six-Month Return Default Can Be Restored on Compliance With Rule 22(4): Gauhati HC [Read Order]

The Gauhati High Court allowed a taxpayer to seek restoration of her GST registration, which was cancelled for non-filing of GST returns for a continuous period of six months.

The writ petition was filed by Jumoni Boruah Phukan, who was engaged in execution of works contract services and retail business as a proprietorship concern. She was registered under the Central Goods and Services Tax Act, 2017 and the Assam Goods and Services Tax Act, 2017.

The petitioner challenged the cancellation of her GST registration dated 25.04.2024 passed by the Superintendent, CGST, Golaghat I Range. The cancellation followed a show cause notice dated 05.02.2024, issued on the ground that she had not filed GST returns for a continuous period of six months. Her registration was also suspended from 05.02.2024.

The petitioner’s counsel argued that she could not file the required GST returns due to acute financial hardship. They submitted that she tried to file an application for revocation of cancellation, but the prescribed time limit had already expired. They further argued that the petitioner had rectified the defaults and updated pending GST returns till April 2024.

The petitioner’s counsel also argued that she was ready and willing to comply with the requirements under the proviso to Rule 22(4) of the CGST Rules, 2017. They relied on the decision of a coordinate bench in Dhirghat Hardware Stores & Anr. v. Union of India & 3 Ors., where similar relief was granted.

The counsel appearing for CGST fairly submitted that the ruling in Dhirghat Hardware Stores was rendered on similar facts and law and would cover the petitioner’s case.

Justice Kardak Ete observed that the earlier coordinate bench ruling squarely covered the case. The court referred to Rule 22(4), which permits dropping of cancellation proceedings when the taxpayer furnishes pending returns and makes full payment of tax dues along with applicable interest and late fee.

The court directed the petitioner to approach the concerned authority within 60 days seeking restoration of GST registration. It also directed that if the petitioner complies with Rule 22(4), the authority must consider the application in accordance with law and take steps for restoration as early as possible. The petitioner was also directed to pay arrears of tax, penalty, interest and late fees.

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