Apurba Enterprise And Anr Vs State of Assam And 8 Ors (Gauhati High Court)
The case before the Gauhati High Court concerns a challenge to the cancellation of GST registration under Section 29 of the CGST/AGST Act, 2017 and the consequential withholding of contractual dues. The petitioner, a sole proprietorship engaged in small contractual works for Government departments, had obtained GST registration in 2019 and initially complied with return filing and tax payment requirements through a tax consultant. However, due to loss of contact with the consultant and a bona fide belief that compliance was being maintained, returns were not filed for a continuous period of six months.
A show-cause notice was issued proposing cancellation of registration, and although a reply was submitted, the authority cancelled the registration without granting further opportunity for clarification. The petitioner attributed the failure to effectively contest the proceedings to miscommunication with the consultant and external factors such as protests and the COVID-19 pandemic. The petitioner later expressed willingness to file all pending returns and discharge all tax liabilities, but faced difficulties due to cancellation of registration.
The Court examined Section 29(2)(c) and Rule 22 of the CGST Rules, 2017, particularly the proviso to Rule 22(4), which allows the proper officer to drop cancellation proceedings if the taxpayer furnishes pending returns and pays all dues along with interest and late fee. The Court observed that cancellation of registration entails serious civil consequences and that the statutory framework provides an opportunity for restoration upon compliance.
