GST registration cancellation for non-filing may be restored if pending returns, tax dues, interest and late fee are fully paid.

Cancellation of GST registration for continuous non-filing of returns carries serious civil consequences, but restoration may be considered where the registered person regularises the default. Under the proviso to Rule 22(4) of the CGST Rules, 2017, if all pending returns are furnished and the tax dues, interest and late fee are paid, the proper officer is to drop the proceedings and pass the prescribed order. The text notes that, on compliance with these conditions, the applicant may seek restoration of the cancelled registration and the authority must consider the request in accordance with law.

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Issues: Whether cancellation of GST registration for non-filing of returns could be revisited and restoration directed where the registered person undertakes to furnish all pending returns and pay the tax dues, interest and late fee in terms of the proviso to Rule 22(4) of the CGST Rules, 2017.

Analysis: Cancellation of registration under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 on the ground of continuous non-filing of returns carries serious civil consequences. The proviso to Rule 22(4) of the Central Goods and Services Tax Rules, 2017 provides that where the person, instead of merely replying to the show-cause notice, furnishes all pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass the prescribed order. On the facts, the petitioner had already regularised the defaults and sought the same relief as had been granted in a similar case.

Conclusion: The petitioner was entitled to seek restoration of GST registration, and the concerned authority was required to consider the application in accordance with law upon compliance with the stipulated conditions.

Final Conclusion: The writ petition was disposed of by granting conditional liberty to pursue restoration of the cancelled GST registration and by directing compliance with the arrears and return-filing requirements before the authority.

Ratio Decidendi: Where GST registration is cancelled for non-filing of returns, the proper officer must consider restoration and may drop the proceedings if the registered person furnishes all pending returns and pays the tax dues, interest and late fee as contemplated by the proviso to Rule 22(4) of the CGST Rules, 2017.

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