GST registration cancellation for non-filing can be dropped when pending returns and dues are fully paid.

Where GST registration is cancelled for non-filing of returns, the proviso to Rule 22(4) of the CGST Rules permits the proper officer to drop the cancellation proceedings if the taxpayer furnishes all pending returns and pays the tax dues, interest and late fee in full. Because cancellation carries serious civil consequences, the authority must consider restoration once the statutory conditions are satisfied and pass orders according to the prescribed procedure. The document states that a registered person in such circumstances is entitled to approach the concerned authority for restoration of registration, subject to compliance with the rule.

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Issues: Whether, after cancellation of GST registration for non-filing of returns, the registered person can seek restoration by furnishing all pending returns and making full payment of tax dues, interest and late fee, and whether the proper officer has jurisdiction to drop the cancellation proceedings.

Analysis: The cancellation was founded on non-furnishing of returns for the prescribed period. The proviso to Rule 22(4) of the Central Goods and Services Tax Rules, 2017 contemplates that where the person, instead of replying to the show-cause notice, furnishes all pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass the prescribed order. In view of the serious civil consequences flowing from cancellation of registration, the authority is empowered to consider restoration when the statutory requirements are satisfied.

Conclusion: The petitioner is entitled to approach the concerned authority for restoration of GST registration, and upon compliance with the proviso to Rule 22(4), the authority must consider the request and pass orders in accordance with law.

Ratio Decidendi: Where cancellation of GST registration is for non-filing of returns, the proceedings must be dropped if the taxpayer furnishes all pending returns and clears the tax dues with applicable interest and late fee, and the proper officer has authority to restore the registration in accordance with the prescribed procedure.

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