Restoration of GST registration if pending returns and tax with interest and late fee are paid; officer drops cancellation.

Petitioners whose GST registration was cancelled for continuous non-filing of returns may seek restoration by furnishing all pending returns and making full payment of tax dues with applicable interest and late fee under the proviso to sub rule (4) of Rule 22 of the CGST Rules, 2017; on such compliance the proper officer has jurisdiction to drop cancellation proceedings and pass the prescribed order. Petitioners are permitted to apply to the competent authority within two months and the authority must consider and dispose of the application expeditiously, preferably within 60 days; tax recovery period to be computed from this order subject to the stated exception for the 2025 26 year.

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Issues: Whether petitioners whose GST registration was cancelled under the statutory provision for non-filing of returns can seek restoration of registration by furnishing all pending returns and making full payment of tax dues with interest and late fee as provided in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, and whether the authority has jurisdiction to drop cancellation proceedings on such compliance.

Analysis: The statutory framework comprises Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 which permits cancellation of registration where returns are not furnished for a continuous period of six months, and Rule 22 of the Central Goods and Services Tax Rules, 2017 which prescribes the show cause procedure and remedies. The proviso to sub-rule (4) of Rule 22 permits the proper officer to drop proceedings and pass the prescribed order in Form GST REG-20 where the person furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee. The petitioners were unable to respond in time but express readiness to furnish pending returns and pay dues; the appellate remedy was time-barred. In these circumstances the appropriate relief is to permit the petitioners to approach the competent authority within a stipulated period, require the authority to consider the application for restoration in accordance with the proviso to sub-rule (4) of Rule 22 and to pass orders expeditiously; further, the period for computing tax recovery under Section 73(10) is to be computed from the date of the instant order subject to the stated exception for the financial year 2025-26 under Section 44.

Conclusion: Petitioners are entitled to approach the proper officer within two months to seek restoration of GST registration; on furnishing all pending returns and making full payment of tax dues with applicable interest and late fee as per the proviso to sub-rule (4) of Rule 22 of the Central Goods and Services Tax Rules, 2017, the proper officer has the authority and jurisdiction to drop the cancellation proceedings and pass orders in accordance with law. The authority shall consider and dispose of the application expeditiously preferably within 60 days from receipt of certified copy of this order.

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