GST registration cancellation may be restored after filing pending returns and clearing tax dues, interest and late fee.

Cancellation of GST registration for continuous non-filing of returns has serious civil consequences, but the statutory scheme allows restoration where the taxpayer furnishes all pending returns and pays the tax dues, interest and late fee. Under the proviso to Rule 22(4) of the CGST Rules, the proper officer may drop cancellation proceedings and issue the prescribed order when those conditions are met instead of a contested response. The petitioner was therefore given liberty to apply for restoration before the competent authority, which was directed to consider the request in accordance with law upon compliance with the prescribed requirements.

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Issues: Whether cancellation of GST registration for non-filing of returns could be restored on the petitioner furnishing pending returns and paying tax dues, interest and late fee.

Analysis: Cancellation of registration under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 for continuous non-filing of returns carries serious civil consequences. The proviso to Rule 22(4) of the Central Goods and Services Tax Rules, 2017 permits the proper officer to drop cancellation proceedings and issue the prescribed order where the person, instead of contesting the notice, furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee. In view of this statutory scheme, the petitioner was permitted to seek restoration before the competent authority by complying with those requirements within the time granted by the Court.

Conclusion: The cancellation was not set aside outright, but the petitioner was given liberty to apply for restoration and the competent authority was directed to consider restoration in accordance with law upon compliance with the prescribed conditions.

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