Gauhati High Court Asks Authorities To Consider GST Registration Restoration If Taxpayer Clears Dues And Files Returns

The Gauhati High Court has directed authorities to consider restoration of GST registration where a taxpayer is willing to furnish pending returns and clear dues, observing that cancellation entails “serious civil consequences.”

Justice Anjan Moni Kalita held that if the taxpayer complies with Rule 22(4) of the CGST Rules, the proper officer shall consider the case and pass appropriate orders.

The case arose from a writ petition filed by Apurba Enterprise challenging cancellation of its GST registration dated December 7, 2019 under Section 29 of the CGST/AGST Act, along with withholding of contractual dues.

The petitioner submitted that due to miscommunication with a tax consultant and circumstances including the anti-CAA protests and the COVID-19 pandemic, it could not effectively respond to the show cause notice.

The court noted that the registration was cancelled for non-filing of returns for a continuous period of six months under Section 29(2)(c).

Referring to Rule 22(4), the Court quoted, “where the person instead of replying to the notice served under sub rule (1) for contravention of the provisions contained in Clause (b) or Clause (c) of sub-section (2) of section 29, furnishes all the 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 an order in FORM GST REG-20.”

The court held, “in the event of the petitioners approach the officer, duly empowered, by furnishing all pending returns and making full payment of the tax dues, along with all applicable interest and late fee, the officer, duly empowered, to consider the case of the petitioners and to drop the proceeding and pass an appropriate order in the prescribed form.”

The court disposed of the petition directing authorities to consider the petitioner's application for restoration within two months.

It further clarified that the petitioner would be liable to pay all arrears, including tax, penalty, interest, and late fee, and that condonation of delay in the present case shall not be treated as a precedent.

For Petitioner: Advocates D. J. Kapil, A. Bhattacharjee

For Respondents: Advocate B. Choudhury, Standing Counsel (Finance & Taxation), Assam