GST registration cancellation under Section 29(2)(c) set aside, authorities must revoke upon payment of dues

The Gauhati HC allowed a writ petition challenging GST registration cancellation under Section 29(2)(c) of CGST Act, 2017 for non-filing of returns for six months. The court set aside the cancellation order, directing the petitioner to approach authorities within one month seeking revocation. Following Rule 22 of CGST Rules, 2017 and precedent decisions, the court held that upon payment of all outstanding statutory dues, interest, and late fees, authorities must revoke the cancellation and restore GST registration.

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Issues involved:
The cancellation of GST registration due to non-furnishing of returns for a continuous period of 6 months under Section 39(1) of the CGST Act, 2017.

Summary:
The petitioner, a businessman engaged in works contract business, had his GST registration cancelled for not submitting returns for over 6 months, despite reasons beyond his control such as the Covid-19 pandemic affecting his business financially. The petitioner tried to file for revocation after filing returns but missed the deadline. The case revolved around Section 39(1) of the CGST Act, 2017, which mandates monthly return filing, and Rule 22 of the CGST Rules, 2017, detailing the procedure for cancellation of registration.

The petitioner's counsel argued that due to pandemic-related financial losses, the petitioner couldn't file returns for over 6 months. The counsel referenced similar writ petitions where GST registrations were restored, urging a similar outcome. The Standing Counsel for CGST acknowledged similar orders by the court in comparable cases.

Considering the necessity for entities to pay statutory dues under the GST regime to contribute to revenue, the court emphasized the importance of the petitioner complying with tax obligations. The court noted the provisions of Rule 22(4) allowing for dropping proceedings if pending returns are filed and tax dues are paid, along with the petitioner's willingness to comply.

Ultimately, the court set aside the cancellation order and directed the petitioner to approach the authority for revocation within a month, pay any outstanding dues, and upon payment, the authority would restore the GST registration. The court disposed of the writ petition with no costs incurred.

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