GST registration cancellation for non-filing of returns may be restored on filing pending returns and paying dues, interest and late fee.

GST registration cancelled for continuous non-filing of returns may be restored where the taxpayer furnishes all pending returns and pays the tax dues, applicable interest and late fee. The proviso to Rule 22(4) of the CGST Rules, 2017 empowers the proper officer to drop cancellation proceedings on such compliance, and cancellation under Section 29(2)(c) carries serious civil consequences. The court directed the taxpayer to approach the competent authority and comply with the statutory requirements, and the authority was to consider restoration in accordance with law.

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Issues: Whether GST registration cancelled for non-filing of returns could be restored on the petitioner furnishing all pending returns and paying the tax dues, interest and late fee in terms of the proviso to Rule 22(4) of the CGST Rules, 2017.

Analysis: The registration had been cancelled under Section 29(2)(c) of the CGST Act, 2017 on the ground of continuous non-filing of returns. The proviso to Rule 22(4) of the CGST Rules, 2017 permits the proper officer to drop the proceedings where the person, instead of merely replying to the notice, furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee. Since cancellation of registration entails serious civil consequences, the remedy of restoration was considered available if the statutory conditions were complied with. The Court therefore directed the petitioner to approach the competent authority and comply with the requirements under the proviso.

Conclusion: The petitioner was granted an opportunity to seek restoration of GST registration by complying with the pending statutory obligations, and the competent authority was directed to consider restoration in accordance with law.

Final Conclusion: The writ petition was disposed of with a direction enabling restoration of the cancelled GST registration upon compliance with the prescribed return-filing and payment requirements.

Ratio Decidendi: Where cancellation of GST registration is based on non-filing of returns, the proviso to Rule 22(4) authorises restoration by dropping the cancellation proceedings if all pending returns are furnished and the tax dues with applicable interest and late fee are paid.

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