Case Law Details
Tadar Akin Vs Union of India (Gauhati High Court)
The Gauhati High Court disposed of a writ petition filed by a proprietor whose GST registration had been cancelled on the ground of non-filing of returns. The petitioner challenged the order dated 06.03.2019 passed by the Superintendent of Taxes, Itanagar Zone-II, Arunachal Pradesh, cancelling the GST registration of the proprietorship concern, M/S Arunachal Offset Enterprise, for failure to submit returns. The petitioner stated that he was unaware of the show cause notice dated 04.07.2021 because he did not have access to his login credentials and, therefore, could not submit any response. It was further submitted that there was no intention to evade tax or violate the GST law and that the default had occurred due to lack of familiarity with GST portal procedures. The petitioner informed the Court that all pending returns up to June 2021 had already been furnished and expressed readiness to pay the entire tax liability along with applicable interest, late fees, and penalties. However, restoration of registration could not be obtained due to delay in filing the relevant application.
The petitioner relied upon earlier decisions of the Gauhati High Court involving similar facts, particularly the order passed in Yamang Siram v. Union of India. The respondent authorities submitted that the cancellation had been carried out in accordance with the Central Goods and Services Tax Act, 2017 because the petitioner had failed to file returns for a continuous period of six months. At the same time, the authorities fairly stated that if the petitioner had furnished the pending returns and discharged all dues, an application for restoration of registration could be considered in accordance with law, as had been directed in similar cases.
The Court examined its earlier judgments dealing with comparable issues. It referred to its decision in Dug Rade v. Union of India, which had considered the proviso to Rule 22(4) of the CGST Rules, 2017. The Court reiterated that under Section 29(2)(c) of the CGST Act, GST registration may be cancelled where returns are not furnished for a continuous period of six months. Rule 22 prescribes the procedure for cancellation. The proviso to Rule 22(4) provides that where a person furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fees, the proper officer shall drop the cancellation proceedings and pass an order in Form GST REG-20.
The Court noted that previous coordinate benches had consistently granted relief where taxpayers had subsequently complied with statutory requirements by filing pending returns and paying dues. The Court also referred to observations made in Yamang Siram, where it was held that cancellation of GST registration entails serious civil consequences because it prevents a person from carrying on business in a valid manner under the GST regime. In that case, the Court had emphasised that orders cancelling registration must be speaking orders containing reasons. Non-speaking orders, lacking reasons and reflecting absence of application of mind, were held to be legally unsustainable.
The earlier judgment had further recognised that while statutory dues are essential for revenue collection, exclusion of a taxpayer from the GST framework may adversely affect both the taxpayer and the proper accounting of taxes. Therefore, where statutory prescriptions under Rule 22 permit restoration upon compliance, the concerned authorities must consider such cases in accordance with law.
Applying the principles laid down in those earlier decisions, the Gauhati High Court held that the petitioner in the present case was entitled to similar relief. The Court took note of the petitioner’s assertion that all pending returns up to June 2021 had been furnished and that the petitioner was willing to make full payment of outstanding tax liabilities together with applicable interest, late fees, and penalties.
Accordingly, the writ petition was disposed of with directions to the petitioner to submit an appropriate application before the concerned respondent authorities within twenty days from the date of the order seeking restoration of GST registration. The Court further directed that upon receipt of such application, the authorities should verify the petitioner’s compliance with the applicable legal requirements, consider the application in accordance with law, and thereafter restore the GST registration. The entire exercise was directed to be completed within four weeks from the date of receipt of a certified copy of the Court’s order. The writ petition was disposed of in these terms.
FULL TEXT OF THE JUDGMENT/ORDER OF GUWAHATI HIGH COURT
Heard Ms. K. Yamak, learned counsel for the petitioner. Also heard Mr. T. Kipa, learned Standing Counsel, C.G.S.T. and Customs as well as Ms. O. Jerang, learned counsel appearing on instructions of Shri M. Kato, learned Dy. S.G.I.2. Having considered that this Court has disposed of similar matters and as agreed to by the learned counsel appearing for the parties, this writ petition is disposed of at the motion stage itself.
2. The petitioner is aggrieved by the order dated 06.03.2019, passed by the Superintendent, Taxes, Itanagar Zone-II, Arunachal Pradesh, whereby the GST Registration, bearing GSTIN/UIN: 12BPA7616K2ZB, of the petitioner has been cancelled on account of failure to submit returns.
3. The petitioner has been carrying on business through his proprietorship firm under the name of M/S Arunachal Offset Enterprise, Papum Pare, Arunachal Pradesh, registered under the Goods and Services Tax Act, 2017 and having GST Registration, bearing GSTIN/UIN: 12BPA7616K2ZB.
4. The petitioner has been carrying on business through his proprietorship firm under the name of M/S Arunachal Offset Enterprise, Papum Pare, Arunachal Pradesh, registered under the Goods and Services Tax Act, 2017 and having GST Registration, bearing GSTIN/UIN: 12BPA7616K2ZB.
5. Having found that the petitioner had failed to file the requisite returns, a Show Cause Notice dated 04.07.2021 was issued by the respondent authority directing the petitioner to show cause as to why the GST Registration should not be cancelled on account of non-filing of returns for a continuous period of six months. Thereafter, vide the impugned order dated 06.03.2019, the GST Registration of the petitioner was cancelled.
6. Ms. K. Yamak, learned counsel for the petitioner submits that the petitioner was not aware of the aforesaid Show Cause Notice dated 04.07.2021 as his login credentials was not with him and therefore, could not submit a reply. She submits that the petitioner has no intention either to evade payment of tax or to violate the provisions of the GST Act, 2017 and it was only due to lack of familiarity with the GST portal procedures that the petitioner could not file the returns and pay the requisite tax on time. The petitioner has already furnished all the pending returns till June 2021 and is also ready and willing to make full payment of the tax dues along with the applicable interest, late fee and penalty, if any. However, since there was delay in filing the application, the petitioner’s GST Registration could not be restored.
7. Ms. Yamak, learned counsel for the petitioner, by referring to the order dated 29.04.2026, passed by the Co-ordinate Bench of this Court in WP(C) No. 185/2026 (Yamang Siram Vs. The Union of India & 2 Ors.) submits that a similar matter has already been disposed of by this Court and therefore, prays for granting similar relief to the petitioner.
8. Mr. T. Kipa, learned Standing Counsel, C.G.S.T. and Customs Department submits that the petitioner’s GST Registration was cancelled in accordance with the provisions of Central Goods and Services Tax Act, 2017 on account of non-filing of returns for a continuous period of six months. He, however, fairly submits that if the petitioner has already furnished all the pending returns and deposited the applicable tax, interest, late fee and penalty and if the petitioner submits an appropriate application seeking restoration of the GST Registration before the competent authority, the same may be directed to consider by the respondent authorities in accordance with law, as has been done in similar matters disposed of by this Court. Considered the submission of learned counsel for the parties and perused the materials available on record.
9. This Court, vide order dated 19.03.2026, passed in WP(C) No. 108/2026 (Dug Rade Vs. Union of India & Ors.), has considered and disposed of a similar issue as involved in the instant case. The relevant paragraphs are reproduced herein below:-
“7. It appears that vide order dated 31.12.2024 (Annexure-C), the GST registration of the petitioner was cancelled after issuing a Show Cause Notice, dated 07.10.2024 (Annexure-B). It also appears from the Annexures-D and E series of documents enclosed with the petition, that the petitioner has already filed the returns and also deposited the penalty amount. Further,from the Annexure-F, the order dated 06.03.2026, passed in WP(C) No. 86(AP) of 2026, it appears that this Court, having relied upon the decision of another Coordinate Bench of this Court in the case of Pankaj Mohan vs. Union of India, in WP(C) Nos. 7342/2025, decided on 18.12.2025, found that the petitioner therein was similarly situated to the petitioner in the said case and accordingly granted relief on the same terms. The relevant para of the said decision is reproduced herein below, for ready reference:-
“10. Considered the submissions of the learned counsel for the parties and also perused the judgment and order dated 17.10.2025 passed by a Coordinate Bench of this Court in the case of Dhirghat Hardware Stores (supra). The relevant paragraphs of the said judgment are reproduced hereinbelow:
8. As per Section 29(2)(c) of the Act, an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for a continuous period of 6 (six) months. Rule 22 of the CGST Rules, 2017 has laid down the procedure for cancellation of the registration.
9. Rule 22 of the CGST Rules, 2017 being the bone of contention, is extracted herein below:-
Rule 22: Cancellation of Registration (1) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29, he shall issue a notice to such person in FORM GST REG-17, requiring him to show cause within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled. (2) The reply to the show cause notice issued under sub-rule [1] shall be furnished in FORM REG-18 within the period specified in the said sub-rule.
(3) Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application submitted under Rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1), (or under sub-rule (24) of Rule 21A) cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him pay arrears of any tax, interest or penalty including the amount liable to be pa under sub-section (5) of Section 29.
(4) Where the reply furnished under sub-rule (2) (or in response to the no issued under sub-rule (24) of Rule 214) is found to be satisfactory, the pre officer shall drop the proceedings and pass an order in FORM GST REG Provided that 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.
(5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself. 10. It is discernible from a reading of the proviso to sub-rule (4) of Rule 22 of the Rules of 2017 that if a person, who has been served with a show cause notice under Section 29(2)(c) of the Act, is ready and willing to furnish all the pending returns and to make full payment of the tax itself along with applicable interest and late fee, the officer, duly empowered, can drop the proceedings and pass an order in the prescribed Form Le Form GST REG-20.
11. The learned counsel for the parties have also referred to an Order dated 11.10.2023 passed in a writ petition being WP(C) No.6366/2023 (Sanjoy Nath vs. The Union of India and others) wherein the petitioner therein was similarly situated like the present petitioners.
12. Having regard to the fact that the GST registration of the petitioner has been cancelled under Section 29(2) (c) of the Act, for the reason that the petitioners did not submit returns for a period of 6 (six) months and more and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences, this Court is of the considered view that in the event the petitioners approach the officer, duly empowered, by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, may consider to drop the proceedings and pass an appropriate order in
13. In such view of the matter, this writ petition is disposed of by providing that the petitioners shall approach the concerned authority within a period of 2 (two) months from today seeking restoration of her GST registration. If the petitioners submit such an application and complies with all the requirements as provided in the proviso to Rule 22 (4) of the Rules, the concerned authority shall consider the application of the petitioners for restoration of GST registration in accordance with law and shall take necessary steps for restoration of GST registration of the petitioner as expeditiously as possible.
14. It is needless to say that the period as stipulated under Section 73 (10) of the Central GST Act/State GST Act shall be computed from the date of the instant order, except for the financial year 2024-25, which shall be as per Section 44 of the Central GST Act/State GST Act. The petitioners herein wou also be liable to make payment of arrears i.e. tax. penalty, interest and la fees.”
8. Thus, in view of the submissions of learned counsel for both the parties, and taking note of the order dated 06.03.2026, passed by the Coordinate Bench of this Court in WP(C) No. 86(AP) of 2026, as well as the decision dated 18.10.2025, in Pankaj Mohan(supra), this Court is inclined to dispose of the present petition by directing the petitioner to file an appropriate application before respondent Nos. 2 and 3 within a period of 15 (fifteen) days from the date of passing of this order for restoration of his GST registration.
9. Upon such application being filed, the respondent authorities shall verify and consider the same in accordance with law and thereafter, restore the GST registration of the petitioner.
10. The aforesaid exercise(s) shall be carried out within a period of 4 (four) weeks from the date of receipt of a certified copy of this order.”
11. Further, in the case of Yamang Siram Vs. The Union of India & 2 Ors., passed in WP(C) No. 185/2026, a Co-ordinate Bench of this Court, vide order dated 29.04.2026, has considered and disposed of the similar matter. The relevant paragraphs are reproduced herein below:-
“20. Under the GST regime a registered assessee is required to pay the statutory dues under the CGST Act or the SGST Act, as the case may be, or both. These statutory dues are required to be paid by all the assessees, who are registered under the GST regime, mandatorily. Such payments of statutory dues contribute towards the State Exchequer. If a taxable person like the petitioner is not included within the GST regime, then any statutory dues that may be required to be deposited by an assessee like the petitioner would not be deposited and properly accounted for and such a situation is, albeit, not in the interest of the revenue.
21. At the same time, cancellation of GST registration would entail adverse civil consequences to the person affected as due to cancellation of her registration under the GST regime, the person would be outside it and it would be difficult for the person to carry on any business in a valid manner. It is not in doubt that the impugned Order dated 26.12.2024 whereby the petitioner’s GST registration has been cancelled is an order which has the consequence of bringing adverse consequences to the petitioner.
22. When the contents of the impugned Order dated 26.12.2024 are looked at, it is found that in the impugned Order, the Proper Officer has not assigned any reason as to why the petitioner’s GST Registration has been cancelled.
23. On perusal of the impugned Order, it is evidently clear that the impugned Order is not in conformity with the procedure prescribed in FORM GST REG19. A speaking order is one which expressly states the reasons for the decision. In other words, a speaking order speaks for itself by assigning the reasons behind the conclusion. If an order is passed without giving a reason by the concerned authority, then the order is a non-speaking one. Nonspeaking order is one which does not provide a clear reason for its decision. The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice dated 12.08.2024 or did not appear before the Proper Officer, when she was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality.
24. An adjudicating authority exercising statutory power of cancelling registration under the CGST Act must record reasons for its decision, unless such obligation is expressly or impliedly dispensed with. It is implicit in the principles of natural justice and fair play that an adjudicating authority should record reasons as it is part of fair procedure, more particularly, when the decision is likely to affect the right of the person concerned. Recording of reason is also prima facie suggestive of conscious application of mind on the part of the authority. The obligation to record reasons is a possible check against arbitrary action on the part of the adjudicating authority invested with the statutory power to take a decision which is likely to affect the right of the person concerned. When the statute itself contains a prescription to record reasons in the decision, absence of reasons in the decision falls short of the prescription and would be in violation of the prescription and thus, illegal. A look at FORM GST REG-19 also goes to substantiate that the Proper Officer is obligated to record his reason[s] for taking the action of cancellation of GST Registration.
25. Thus, from every standpoint, the impugned Order dated 26.12.2024 is not a speaking order. As such, the impugned Order dated 26.12.2024 is found to be one which is passed without any application of mind. For the afore-stated reasons, the impugned Order dated 26.12.2024 cannot stand the scrutiny of law and is liable to be set aside and quashed.
26. A submission has been made that the writ petition has been preferred with delay as the petitioner has filed the writ petition in April, 2026, that is, after more than one year four months from the order of cancellation of registration. Although the petitioner has not approached the Court immediately after the order of cancellation of registration, this Court is of the considered view that when the extent of vulnerability of the order of cancellation of registration is due to not meeting the statutory prescription of recording reasons is pitted against the delayed approach, the vulnerability of the order of cancellation of registration, due to statutory breaches, would far outweigh the delayed approach because of its likely adverse affect on a registered person like the petitioner.
27. For all the afore-mentioned reasons, the impugned Order dated 26.12.2024 is set aside and quashed. With the setting aside and quashing of the impugned Order dated 26.12.2024, the matter stands reverted back to the stage of issuance of the Show Cause Notice in FORM GST REG-17.
28. It is discernible from a reading of the proviso to sub-rule [4] of Rule 22 of the CGST Rules that if a person who has been served with a Show Cause Notice under Section 29[2][c] of the CGST Act is ready and willing to furnish all the pending returns and to make 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 the prescribed Form, that is, Form GST REG-20.
29. In the above fact situation obtaining in the case in hand, it is open for the petitioner to submit a Reply to the Show Cause Notice dated 12.08.2024 showing reason[s] as to why the GST Registration should not be cancelled in terms of sub-rule [2] of Rule 22 of the CGST Rules read with Section 29[2][c] of the CGST Act. In the alternative, the petitioner-assessee, at the time of or instead of, replying to the Show Cause Notice served under sub-rule [1] of Rule 22 of the CGST Rules, can furnish all the pending returns and make full payment of the tax dues along with the applicable interest, late fee and penalty, if any. It is, therefore, observed that it would be open for the petitioner-assessee to avail either of the two options. This Court, for ends of justice, deems it just and proper to grant a period of one month from today to the petitioner to avail either of the two permissible options. If the petitioner wants to know her outstanding dues including the tax dues, applicable interest, late fee, penalty, etc. the Proper Officer shall furnish or shall supply such details to the petitioner if the petitioner approaches him within the said period of one month. It is further observed that depending on the option availed by the petitioner, the Proper Officer shall proceed thereafter, in accordance with the procedure prescribed in Section 29 of the CGST Act and Rule 22 of the CGST Rules to bring the process to its logical conclusion by passing appropriate order either in FORM GST REG-19 or FORM GST REG-20, as the case may be, as expeditiously as possible, but, not later than a period of one month thereafter.”
12. Having considered that similar matters have already been dealt with and disposed of by this Court in the case of Dug Rade (supra) and other similar writ petitions and as agreed to by the learned counsel appearing for the parties, this Court is of the considered view that the petitioner is entitled to similar relief, as the petitioner has already furnished the pending returns till June, 2021 and is also ready and willing to make full payment of the tax dues along with the applicable interest, late fee and penalty, if any. Accordingly, this writ petition is disposed of by directing the petitioner to file an appropriate application before the respondent Nos. 2 and 3 within 20 (twenty) days from the date of passing of this order for restoration of his GST Registration.
13. Upon such application being filed by the petitioner, the respondent authorities shall verify and consider the same in accordance with law and thereafter restore the GST Registration of the petitioner.
14. The aforesaid exercise shall be carried out within a period of 4 (four) weeks from the date of receipt of a certified copy of this order.
15. The writ petition stands disposed of in terms of the above.
Author Bio
