2023 (12) TMI 160 - HC - GST

GST Registration Cancellation Overturned: Taxpayer Given Chance to Restore Status by Fulfilling Pending Compliance Obligations

SANJOY NATH Versus THE UNION OF INDIA AND 2 ORS, THE PRINCIPAL COMMISSIONER CGST CENTRAL EXCISE AND SERVICE TAX, THE SUPERINTENDENT CGST BONGAIGAON-4 ASSAM

SC upheld GST registration cancellation but provided opportunity for restoration. Court directed petitioner to approach tax authority within two months, ... Cancellation of GST registration of petitioner - cancellation for the reason that the petitioner did not submit returns for a period of six months and more - HELD THAT:- As per the provisions contained in the proviso to sub-rule [4] of Rule 22 of the CGST Rules, 2017, this Court is of the considered view that 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 in the prescribed Form. This writ petition is disposed of by providing that the petitioner shall approach the concerned authority within a period of 2 [two] months from today seeking restoration of his GST registration. Issues involved: GST registration cancellation u/s 29[2][c] of the CGST Act, 2017 due to non-furnishing of returns for 6 months or more.The petitioner, a sole proprietor registered under the Central Goods and Services Tax Act, 2017, had his GST registration canceled for not furnishing returns for a continuous period of 6 months or more, as per Section 29[2][c] of the CGST Act, 2017 read with Rule 22 of the CGST Rules, 2017. The petitioner submitted his reply to the show cause notice and appeared before the authority, but the registration was still canceled. The petitioner expressed readiness to comply with all formalities required under Rule 22 of the CGST Rules, 2017. The petitioner sought restoration of his GST registration. The Court considered the cancellation and the provisions of Rule 22 of the CGST Rules, 2017. The Court held that if the petitioner approaches the authority, furnishes pending returns, and pays tax dues, interest, and late fees, the authority has the power to restore the registration as per the proviso to sub-rule [4] of Rule 22.The petitioner's counsel argued that due to reasons beyond the petitioner's control, he couldn't submit returns as required by Section 39[1] of the CGST Act, 2017 for about 6 months. The counsel stated the petitioner's willingness to comply with the requirements of the proviso to sub-rule [4] of Rule 22 of the CGST Rules, 2017. The counsel referred to a previous order in a similar case to support the petitioner's position.The Court noted that Section 39[1] of the CGST Act, 2017 mandates registered persons to furnish returns for every calendar month or part thereof, electronically, as prescribed. The Court also highlighted the provisions of Rule 22 of the CGST Rules, 2017 regarding the cancellation of registration and the procedure to be followed in such cases. The Court emphasized the importance of complying with the requirements of the law and rules governing GST registration.The Court's decision in this case was influenced by the proviso to sub-rule [4] of Rule 22 of the CGST Rules, 2017, which allows for the restoration of GST registration if the person concerned furnishes pending returns, pays tax dues, interest, and late fees. The Court directed the petitioner to approach the concerned authority within two months for restoration of GST registration, subject to fulfilling the conditions specified in the proviso to sub-rule [4] of Rule 22 of the CGST Rules, 2017.