GST registration restoration on filing pending returns and payment of dues allowed subject to compliance with Rule 22(4) conditions

GST registration cancelled for non-filing of returns may be restored where the registered person furnishes all pending returns and pays tax dues, interest and late fee under the proviso to Rule 22(4) of the CGST Rules. The cancellation here arose from continuous non-filing for six months, but conditional relief was granted on the same approach followed in an earlier coordinate bench decision. The petitioner was directed to approach the authority within 60 days, and the authority was to consider restoration in accordance with law once compliance with the prescribed conditions was shown.

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Issues: Whether cancellation of GST registration for non-filing of returns could be followed by restoration on the petitioner furnishing pending returns and making payment of tax dues, interest and late fee under the proviso to Rule 22(4) of the CGST Rules, 2017; and whether similar relief was warranted on the facts of the case.

Analysis: The cancellation had been made for non-filing of returns for a continuous period of six months under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017. The proviso to Rule 22(4) of the Central Goods and Services Tax Rules, 2017 permits the proper officer to drop cancellation proceedings and pass the prescribed order where the person, instead of merely replying to the notice, furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee. As the case was covered by an earlier coordinate bench decision on similar facts, the Court applied the same approach and granted an opportunity to seek restoration on compliance with the prescribed conditions.

Conclusion: The petitioner was directed to approach the concerned authority within 60 days for restoration of GST registration, and upon compliance with the proviso to Rule 22(4), the authority was to consider and take necessary steps for restoration in accordance with law. The petitioner was also required to pay the arrears of tax, penalty, interest and late fees.

Final Conclusion: The order grants conditional relief enabling restoration of the cancelled GST registration, subject to filing of pending returns and payment of statutory dues, while leaving the authority to act in accordance with law upon such compliance.

Ratio Decidendi: Where GST registration has been cancelled for non-filing of returns, the proviso to Rule 22(4) authorises restoration-related relief if the registered person furnishes all pending returns and clears tax dues, interest and late fee.

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