2026 (4) TMI 207 - HC - GST

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 ... Cancellation of GST registration for non-filing of returns - Proviso to Rule 22(4) of the CGST Rules - Restoration of registration on furnishing pending returns and payment of dues. Cancellation of GST registration for non-filing of returns - HELD THAT: - As per Section 29(2)(c) of the Act, an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for a continuous period of 6 (six) months. The Court held that the proviso to Rule 22(4) makes it clear that where a person served with notice for cancellation on account of non-filing of returns furnishes all pending returns and makes full payment of tax dues together with applicable interest and late fee, the proper officer can drop the cancellation proceedings and pass the prescribed order. Having regard to the serious civil consequences flowing from cancellation of registration, the Court considered it appropriate to allow the petitioner to approach the competent officer and seek restoration on such compliance. The expiry of the revocation timeline was not treated as a bar to the petitioner making such approach in the circumstances of the case. [Paras 11, 13, 14, 15] The petitioner was permitted to approach the concerned authority within two months, and on compliance with the requirements of the proviso to Rule 22(4), the authority was directed to consider restoration of GST registration in accordance with law and take necessary steps expeditiously. Final Conclusion: The writ petition was disposed of with liberty to the petitioner to seek restoration of GST registration by furnishing pending returns and clearing the tax dues with applicable interest and late fee in terms of the proviso to Rule 22(4). The competent authority was directed to consider such request in accordance with law, and the computation under Section 73(10) was directed to run from the date of the order, subject to the exception noted for financial year 2024-25. 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.