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of <h1>GST registration cancellation upheld under Section 29(2)(c) for non-filing returns; restoration possible upon compliance</h1> <h3>MOKIBUR RAHMAN Versus THE UNION OF INDIA AND 3 ORS., THE PRINCIPAL COMMISISONER CENTRAL GOODS AND SERVICES TAX, THE SUPERINTENDENT CENTRAL GOODS AND SERVICES TAX AND CENTRAL EXCISE, THE ADDITIONAL COMMISSIONER (APPEALS) CENTRAL GOODS AND SERVICES TAX AND CENTRAL EXCISE</h3> MOKIBUR RAHMAN Versus THE UNION OF INDIA AND 3 ORS., THE PRINCIPAL COMMISISONER CENTRAL GOODS AND SERVICES TAX, THE SUPERINTENDENT CENTRAL GOODS AND ... ISSUES: Whether GST registration can be cancelled for non-filing of returns for a continuous period of six months under Section 29(2)(c) of the CGST Act, 2017.Whether the procedure prescribed under Rule 22 of the CGST Rules, 2017 for cancellation of registration was properly followed.Whether a person who has failed to file returns timely but subsequently furnishes all pending returns and pays due taxes with interest and late fees can have the cancellation proceedings dropped under the proviso to sub-rule (4) of Rule 22.Whether an application for revocation of cancellation can be entertained beyond the prescribed time limit of 270 days from the date of cancellation order.Whether the court can direct restoration of GST registration despite dismissal of an appeal against cancellation order which has not been specifically challenged. RULINGS / HOLDINGS: The GST registration was rightly cancelled under Section 29(2)(c) for non-filing of returns for six continuous months, as empowered by the statute.The procedure under Rule 22 was applicable, including issuance of show cause notice and opportunity to reply; however, the cancellation order was passed without assigning reasons.Under the proviso to sub-rule (4) of Rule 22, where the person furnishes all pending returns and makes full payment of tax dues along with interest and late fees, the proper officer 'shall drop the proceedings and pass an order in FORM GST REG-20.'The time limit of 270 days for filing an application for revocation of cancellation is mandatory and cannot be extended once expired.Despite the dismissal of the appeal against the cancellation order and absence of specific challenge thereto, the Court may, in the interest of justice, direct the concerned authority to consider restoration of GST registration upon compliance with the proviso to Rule 22(4). RATIONALE: The Court applied Section 29(2)(c) of the CGST Act, 2017, which empowers cancellation of GST registration for continuous non-filing of returns for six months.Rule 22 of the CGST Rules, 2017, prescribes the procedural safeguards including issuance of show cause notice (Form GST REG-17), reply (Form REG-18), and orders for cancellation or dropping proceedings (Forms GST REG-19 and REG-20 respectively).The proviso to sub-rule (4) of Rule 22 introduces a remedial mechanism allowing the proper officer to drop cancellation proceedings if the taxpayer complies by submitting all pending returns and paying dues with interest and late fees.The Court recognized the finality of the statutory time limit of 270 days for revocation applications, as reflected in the GST portal message and statutory provisions.In a doctrinally significant move, the Court exercised its writ jurisdiction to provide relief by directing the authority to consider restoration upon compliance, despite non-challenge of the appeal dismissal, emphasizing the serious civil consequences of cancellation and interest of justice.
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