GST Registration Restoration Allowed Subject to Filing of Pending Returns and Payment of Dues — Gauhati High Court

Case Overview

Case: Tadar Akin Vs Union of India
Court: Gauhati High Court
Provision at Issue: Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 read with Rule 22 of the CGST Rules, 2017

The Gauhati High Court recently disposed of a writ petition concerning the cancellation of GST registration of a proprietorship firm on account of prolonged non-filing of returns. The ruling reaffirms a well-established judicial position taken by coordinate benches of the same Court — that where an assessee demonstrates genuine compliance by filing all pending returns and clearing outstanding dues, restoration of GST registration is a legally permissible and appropriate remedy.

Background Facts

The assessee, operating a proprietorship concern — M/S Arunachal Offset Enterprise, Papum Pare, Arunachal Pradesh — held a GST registration bearing GSTIN/UIN: 12BPA7616K2ZB under the Goods and Services Tax Act, 2017.

The Superintendent of Taxes, Itanagar Zone-II, Arunachal Pradesh, passed an order dated 06.03.2019 cancelling the GST registration of the firm on the ground that the assessee had failed to submit returns for a continuous period exceeding six months. Prior to this cancellation, a Show Cause Notice dated 04.07.2021 was issued calling upon the assessee to explain why the registration should not be cancelled.

Assessee's Explanation

The assessee contended before the Court that:

  • He was not aware of the Show Cause Notice dated 04.07.2021 because he did not possess access to his GST portal login credentials at the relevant time.
  • As a result, no reply was submitted to the notice.
  • There was no deliberate intent to evade payment of tax or to circumvent the provisions of the GST law.
  • The default arose entirely from unfamiliarity with GST portal procedures.
  • All pending returns up to June 2021 had since been filed.
  • The assessee expressed readiness to discharge all outstanding tax liabilities, including applicable interest, late fees, and penalties.
  • Despite filing the pending returns, restoration of the registration could not be secured owing to a delay in submitting the relevant restoration application.

Department's Stand

The Standing Counsel appearing for the Central GST and Customs Department confirmed that the cancellation was carried out strictly in accordance with the provisions of the Central Goods and Services Tax Act, 2017, as the assessee had failed to furnish returns for a continuous period of six months — a ground expressly covered under Section 29(2)(c) of the Act.

However, the Department fairly conceded that if the assessee had indeed filed all pending returns and deposited the applicable tax dues along with interest, late fees, and penalties, an application seeking restoration of registration could be considered in accordance with law. This position was consistent with the approach adopted in earlier similar matters disposed of by the same Court.

Section 29(2)(c) — Cancellation of Registration

Section 29(2)(c) of the CGST Act empowers a duly authorised officer to cancel the GST registration of a person with effect from such date as he deems fit — including a retrospective date — where a registered person has not filed returns for a continuous period of six months.

Rule 22 — Procedure for Cancellation

Rule 22 of the CGST Rules, 2017 prescribes the detailed procedural framework for cancellation of GST registration. The relevant provisions are reproduced below as cited by the Court: