GST registration cancellation can be reconsidered when pending returns are filed and dues paid under Rule 22(4) proviso.

Cancellation of GST registration for continuous non-filing of returns for six months falls within Section 29(2)(c) of the CGST Act, and the cancellation process is governed by Rule 22 of the CGST Rules. The proviso to Rule 22(4) allows the proper officer to drop cancellation proceedings and pass the prescribed order where the taxpayer, instead of replying to the notice, furnishes all pending returns and pays the tax dues with applicable interest and late fee. Given the serious civil consequences of registration cancellation, restoration may be considered if those statutory requirements are satisfied. The taxpayer was allowed to approach the authority within two months, and restoration was to be considered in accordance with law.

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Issues: Whether the cancellation of GST registration under Section 29(2)(c) could be interfered with and the registration restored on the taxpayer furnishing all pending returns and clearing tax dues with interest and late fee under the proviso to Rule 22(4) of the CGST Rules, 2017.

Analysis: Cancellation of registration for non-filing of returns for a continuous period of six months attracts Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 and the procedure for cancellation is governed by Rule 22 of the Central Goods and Services Tax Rules, 2017. The proviso to Rule 22(4) permits the proper officer to drop the cancellation proceedings and pass the prescribed order 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. Since cancellation of registration entails serious civil consequences, the authority can consider restoration if the statutory requirements are met.

Conclusion: The petitioner was permitted to approach the concerned authority within two months and, upon compliance with the proviso to Rule 22(4), the authority was directed to consider restoration of GST registration in accordance with law.

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