Gauhati High Court allows restoration of cancelled GST registration subject to payment of dues

Background of the dispute

In Tai Miri Vs Union of India and 2 Ors, the Gauhati High Court examined the legality of the cancellation of a GST registration on the ground of prolonged non-filing of returns. The assessee carried on multiple businesses, including steel and iron fabrication, brick manufacturing, sale of auto spare parts and execution of Government supply orders, operating under the trade name M/s H.A.C.A. Enterprise from Chimpu, Itanagar, Arunachal Pradesh.

The firm was duly registered under the Goods and Services Tax Act, 2017, bearing Registration No. 12BKWPM6617E3ZX with effect from 14.09.2019. Over time, financial difficulties forced the assessee to discontinue business operations. As a result, GST returns were not filed from March 2021 onwards.

Events leading to cancellation of GST registration

Show cause notice and suspension

  1. Due to continuous default in filing returns, the jurisdictional authorities issued a show cause notice dated 14.01.2023.
  2. The notice alleged non-furnishing of GST returns for a continuous period of six months and:
    • Called upon the assessee to submit a reply within thirty days from the date of service, and
    • Directed personal appearance before the competent officer on 11.02.2023.
  3. Simultaneously, the assessee’s GST registration was placed under suspension with immediate effect.

The assessee contended that all earlier GST compliances had been handled through GST practitioners/Chartered Accountants. Consequently, he did not habitually check the GST portal or his registered e-mail address. According to him, this was the reason he remained unaware of the show cause notice and could neither respond to the notice nor file the pending returns within time.

Cancellation order

With no response received and returns still not filed, the Superintendent of CGST, Naharlagun Zone-I, Itanagar Range, passed an order dated 27.05.2023 cancelling the GST registration. The cancellation was specifically founded on continued non-filing of returns, with the usual caveat that cancellation would not wipe out existing tax liabilities.

Aggrieved by this cancellation order, the assessee filed a writ petition before the Gauhati High Court seeking restoration of the GST registration.

The primary grievance of the assessee was not the issuance of the cancellation order per se, but the practical impossibility of regularising his position after cancellation due to:

  • Expiry of the statutory limitation period for filing an application for revocation of cancellation; and
  • System restrictions under the GST framework which do not permit filing of returns beyond three years from the due date.