GST registration cancellation for non-filing may be reversed if pending returns are filed and dues, interest, and late fee are paid.

GST registration cancelled for continuous non-filing of returns may be restored where the taxpayer furnishes all pending returns and pays the full tax dues, interest and late fee required by the proviso to Rule 22(4) of the CGST Rules, 2017. Cancellation under Section 29(2)(c) is permissible for sustained non-compliance, but the proper officer must drop the proceedings when the statutory conditions in the proviso are satisfied. Because cancellation carries serious civil consequences, the authority retains jurisdiction to consider restoration and must pass an appropriate order in accordance with law.

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

Analysis: Cancellation under Section 29(2)(c) of the CGST Act, 2017 is permissible for continuous non-filing of returns, but the procedure under Rule 22 of the CGST Rules, 2017 includes a specific proviso that, where the person instead of replying to the notice furnishes all pending returns and makes full payment of tax dues with applicable interest and late fee, the proper officer shall drop the proceedings and pass the prescribed order. Since cancellation of registration has serious civil consequences, the authority retains jurisdiction to consider restoration when the statutory conditions in the proviso are satisfied.

Conclusion: The petitioner was entitled to seek restoration of GST registration by approaching the concerned authority within the time granted by the Court and by complying with the proviso to Rule 22(4); the authority was directed to consider such application and pass appropriate orders in accordance with law.

Ratio Decidendi: Where GST registration has been cancelled for non-filing of returns, the proper officer must drop the cancellation proceedings if the taxpayer furnishes all pending returns and pays the full tax dues with interest and late fee as contemplated by the proviso to Rule 22(4) of the CGST Rules, 2017.

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