GST Reg Cancelled for 6-Month Default; Gauhati HC Grants Revival Opportunity

The Gauhati High Court has allowed two months for the company to restore its Goods and Services Tax (GST) registration. This registration was cancelled because it failed to file its GST returns for six consecutive months.

The applicant, D.D. Construction is registered under the provisions of the Central Goods and Services Tax (CGST) Act, 2017/Assam Goods and Services Tax (AGST) Act, 2017, bearing registration no. 18AALFD2009F1ZQ, and due to non-filing of GST returns for a continuous period of 6 months, the applicant was served with an SCN bearing reference no. ZA181123011635X dated 14.11.2023 asking it to file a response to the aforesaid notice within 30 (thirty) days from the date of service of notice.

In the mentioned SCN, it was cited that if the applicant is unable to submit a response on the said date or unable to appear for the personal hearing on the appointed date and time, then the case shall be determined ex parte on the grounds of the records and on merits.

But the date for the personal hearing was reported dated 12.12.2023. After that, the impugned order on 20.02.2024 was issued via the Superintendent, Naharkatia-respondent No.4, cancelling GST registration of the applicant for not submitting the returns for a continuous period of 6 (six) or more months.

After that, the applicant has attempted to submit the required application asking for the revocation of the GST registration cancellation, but it cannot be filed since the set limit to file the revocation application has expired.

The applicant’s counsel, Shri Agarwal, said that because of the reasons that were not under his governance, the applicant cannot file the returns needed to get submitted u/s 39(1) of the CGST Act, 2017, for about 6 (six) months or more. But he expressed that the applicant will follow all the formalities mandated as per the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017.

An officer, as per Section 29(2)(c), duly empowered, can cancel the GST registration of a person from such date that comprises any suitable retrospective date where any registered person has not filed returns for a continuous period of 6 (six) months. Rule 22 of the CGST Rules, 2017, has specified the cancellation process of the registration.

It is discernible from a reading of the proviso to sub-rule (4) of Rule 22 of the CGST Rules 2017 that if a person, who has been furnished with a SCN u/s 29(2)(c) of the CGST Act, 2017, is ready and desire to furnish all the due returns and to make full tax payment itself along with applicable interest and late fee, the officer, duly empowered, can drop the proceedings and pass an order in the prescribed Form i.e. Form GST REG-20.

Under Section 29(2)(c) of the CGST Act, 2017 the GST registration of the applicant has been cancelled because the applicant has not filed the returns for 6 months and more and the provisions included in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and registration cancellation stresses to civil outcomes.

As per the court, if the applicant contacts the designated officer and furnishes all the pending returns while making full payment of the tax dues, including any applicable interest and late fees, the empowered officer has the authority and jurisdiction to terminate the proceedings and issue an order in the required format.

The writ petition has been disposed of by a single bench of Justice Sanjay Kumar Medhi, citing that the applicant will approach the related authority within 2 months from today, asking for the restoration of his GST registration.

If the same application has been furnished by the applicant and complies with the prerequisites as given in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, then the related authority will acknowledge the applicant’s application for the restoration of his GST registration following law and will take crucial steps for restoration of GST registration of the applicant as expeditiously as possible.