GST registration restoration permitted on filing pending returns and clearing tax dues under Rule 22(4)

GST registration cancelled for non-filing of returns under section 29(2)(c) of the CGST Act can be restored where the taxpayer complies with Rule 22(4) of the CGST Rules by furnishing all pending returns and paying tax dues with applicable interest and late fee. Following a co-ordinate Bench decision, the High Court allowed the petitioner to seek restoration before the competent authority within 60 days, and directed the authority to consider the request in accordance with law on such compliance. The petitioner remained liable to pay arrears of tax, penalty, interest and late fees.

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Issues: Whether the petitioner, whose GST registration had been cancelled for non-filing of returns, was entitled to restoration of registration on complying with the requirements under the CGST Rules.

Analysis: The cancellation was founded on Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 for non-furnishing of returns for the prescribed period. The proviso to Rule 22(4) of the Central Goods and Services Tax Rules, 2017 permits the proper officer to drop the cancellation proceedings and pass the prescribed order where the person furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee. Relying on the co-ordinate Bench decision in a similar matter, the Court held that the petitioner should be given the same relief and be allowed to seek restoration by complying with the statutory requirements.

Conclusion: The petitioner was permitted to approach the competent authority within 60 days for restoration of GST registration, and the authority was directed to consider the request in accordance with law upon compliance with Rule 22(4), while the petitioner remained liable to pay arrears of tax, penalty, interest and late fees.

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