Mohd. Afroz Baig Vs Appellate Joint Commissioner of State Tax (ST) (Telangana High Court)
Cancellation of GST Registration for Non-Filing of Returns: Legal Framework and Relief Mechanism: Telangana High Court
The cancellation of GST registration due to non-filing of returns is a common yet critical issue faced by taxpayers. The law provides a structured mechanism not only for cancellation but also for restoration, subject to compliance with prescribed conditions.
Legal Provision for Cancellation of registration:
Section 29(2)(c)– any registered person, other than a person specified in clause (b), has not furnished returns for a such continuous tax period as may be prescribed.
As per the above provision, the proper officer has right to cancel the registration if the taxpayer has not filed returns for continuous period of 6 months.
Procedure for Cancellation
- A show cause notice is issued in Form GST REG-17, specifying the reasons for proposed cancellation.
- The taxpayer is required to respond within 7 days in Form GST REG-18.
- If the reply is found satisfactory, proceedings are dropped through Form GST REG-20.
Importantly, Rule 22(4) provides a beneficial provision—if the taxpayer files all pending returns along with applicable tax, interest, penalty, and late fee, the proper officer must drop the cancellation proceedings.
