GST registration cancellation for non-filing may be reversed after filing pending returns and clearing dues under the compliance route.

GST registration cancelled for continuous non-filing of returns may be restored if the taxpayer files all pending returns and pays the tax dues, interest and late fee required under the CGST framework. Section 29(2)(c) permits cancellation for non-furnishing of returns for six months, but Rule 22 contemplates notice, reply and, where full compliance is made, dropping of cancellation proceedings. Because cancellation has serious civil consequences, the prescribed compliance route can be used to seek restoration of registration, subject to the competent authority considering the request in accordance with law.

---

---

Issues: Whether cancellation of GST registration for continuous non-filing of returns could be addressed by permitting the taxpayer to apply for restoration upon furnishing pending returns and clearing tax dues, interest, and late fee.

Analysis: Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 permits cancellation where returns have not been furnished for a continuous period of six months. Rule 22 of the Central Goods and Services Tax Rules, 2017 prescribes the show-cause and reply procedure, and the proviso to Rule 22(4) contemplates dropping of proceedings where the person furnishes all pending returns and makes full payment of tax dues with applicable interest and late fee. The cancellation of registration carries serious civil consequences, and on the facts placed before the Court, the petitioner was granted an opportunity to seek restoration by following the prescribed compliance route.

Conclusion: The petitioner was directed to approach the competent authority within two months by filing a proper application for restoration, and upon compliance with the statutory requirements, the authority was directed to consider the request and take steps for restoration within 15 days in accordance with law.

Final Conclusion: The writ petition was disposed of by granting a conditional statutory remedy for restoration of GST registration on compliance with the prescribed returns-and-dues requirements.

Ratio Decidendi: Where cancellation of GST registration is founded on non-filing of returns, the proper officer may drop the proceedings and restore the registration upon furnishing all pending returns and payment of tax dues, interest, and late fee in terms of Rule 22(4) of the CGST Rules, 2017.

---