Kipa Tapu Vs Union of India and 4 Ors (Gauhati High Court)
Summary: The Gauhati High Court considered a writ petition challenging cancellation of the Petitioner’s GST registration for non-filing of returns for a continuous period of six months. The Petitioner stated that his proprietorship business, “TOSD Enterprise”, was registered under the CGST/AGST Acts and that, being non-conversant with the online procedure, he could not respond to the show cause notice dated 16th April 2025. The registration was subsequently cancelled by order dated 30th May 2025.
The Petitioner submitted that he had subsequently furnished pending returns up to March 2025 and paid GST dues along with late fees and interest. However, he could not file an application for revocation because the prescribed period had expired. He expressed willingness to comply with the proviso to Rule 22(4) of the CGST Rules, 2017.
The Court considered Section 29(2)(c) of the CGST Act, 2017 and Rule 22 of the CGST Rules, particularly the proviso to Rule 22(4), which provides for dropping cancellation proceedings where pending returns are furnished and tax dues, applicable interest and late fee are fully paid. The Court also noted that cancellation of registration entails serious civil consequences.
The Court held that the empowered officer has authority and jurisdiction to consider restoration where the Petitioner furnishes all pending returns and makes the required payments. The writ petition was disposed of with liberty to approach the concerned authority within two months. The authority was directed to consider the application in accordance with law and preferably complete the process within 60 days from receipt of the certified copy of the order. The Petitioner would also remain liable for arrears of tax, penalty, interest and late fees.
Cancellation of GST Registration for Non-Filing of Returns
The Petitioner was carrying on his proprietorship business under the name and style “TOSD Enterprise” and held GST registration No. 12BRIPT2656K1ZG under the CGST Act, 2017 and AGST Act, 2017.
A show cause notice bearing reference No. ZA1204250013655 dated 16th April 2025 was issued on the ground that GST returns had not been furnished for a continuous period of six months. The notice required the Petitioner to furnish a reply within 30 days and stated that failure to reply or appear for personal hearing would result in the matter being decided ex-parte on the basis of available records and merits.
Thereafter, the Respondent No. 3 passed the impugned order dated 30th May 2025 cancelling the Petitioner’s GST registration for failure to furnish returns for a continuous period of six months or more.
Petitioner’s Explanation for Non-Compliance
The Petitioner contended that he was not conversant with the online procedure and therefore could not access the GST portal to submit a reply to the show cause notice within time. According to the Petitioner, when he subsequently faced obstruction in running his business, he made enquiries with his Tax Consultant and then learnt about the notice.
By that time, the period for filing the reply and attending the hearing had expired and the cancellation order had also been uploaded on the portal.
Pending Returns and Payment of Dues
The Petitioner subsequently updated all pending returns up to March 2025, as permitted by the GST portal. While doing so, he also discharged his GST dues together with applicable late fees and interest.
The Petitioner thereafter attempted to file an application seeking revocation of the cancellation. However, the application could not be filed because the prescribed period had expired, with the portal displaying the message that the timeline of 270 days from the date of cancellation for filing an application for revocation had expired.
Statutory Framework Under Section 29 and Rule 22
The Court considered Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, under which an empowered officer may cancel the GST registration of a person where a registered person has not furnished returns for a continuous period of six months.
The Court also considered Rule 22 of the Central Goods and Services Tax Rules, 2017, which prescribes the procedure for cancellation of registration.
Proviso to Rule 22(4)
The Court specifically examined the proviso to sub-rule (4) of Rule 22. The provision states that where a person, instead of replying to the notice for contravention of Section 29(2)(b) or Section 29(2)(c), furnishes all pending returns and makes full payment of 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.
The Court found that, where a person is ready and willing to furnish all pending returns and make full payment of tax along with applicable interest and late fee, the duly empowered officer can drop the proceedings and pass the prescribed order.
TaxGuru has also reported Gauhati High Court decisions concerning restoration of cancelled GST registrations on compliance with Rule 22(4). A directly relevant publication is GST Registration Can Be Restored If Pending Returns and Dues Are Cleared.
Court’s Consideration of Restoration of GST Registration
The Court noted that the GST registration had been cancelled under Section 29(2)(c) of the CGST Act because the Petitioner had not submitted returns for six months or more.
Considering the proviso to Rule 22(4) and the fact that cancellation of registration entails serious civil consequences, the Court held that if the Petitioner approaches the duly empowered officer by furnishing all pending returns and making full payment of tax dues together with applicable interest and late fee, the officer has the authority and jurisdiction to drop the proceedings and pass an appropriate order in the prescribed form.
Reference to Earlier Gauhati High Court Orders
The learned counsel appearing for the parties also referred to an order dated 11th March 2025 passed in W.P.(C) No. 2244/2024 and an order dated 24th July 2025 passed in W.P.(C) No. 3572/2025, Jinny Daimary Vs. State of Assam & Ors., where the petitioners were stated to be similarly situated.
Directions for Restoration
The Court disposed of the writ petition by permitting the Petitioner to approach the concerned authority within two months from the date of the order seeking restoration of the GST registration.
The Court directed that if the Petitioner submits the application and complies with all requirements under the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, the concerned authority shall consider the application for restoration of GST registration and pass necessary orders in accordance with law.
The entire process was directed to be completed expeditiously and preferably within an outer limit of 60 days from the date of receipt of a certified copy of the order.
Tax, Penalty, Interest and Late Fee
The Court further stated that the period stipulated under Section 73(10) of the CGST Act/State GST Act would be computed from the date of the order, except for the financial year 2025-26, for which the computation would be as per Section 44 of the CGST Act/State GST Act.
The Petitioner would also remain liable to make payment of arrears, namely tax, penalty, interest and late fees.
Final Decision
The Gauhati High Court disposed of the writ petition with directions enabling the Petitioner to seek restoration of his GST registration upon complying with the requirements contained in the proviso to Rule 22(4) of the CGST Rules, 2017.
The concerned authority was directed to consider the application and pass necessary orders in accordance with law, subject to the Petitioner furnishing pending returns and making the required payments.
Cases Discussed
Jinny Daimary Vs. State of Assam & Ors., W.P.(C) No. 3572/2025 — Gauhati High Court
FULL TEXT OF THE JUDGMENT/ORDER OF GUWAHATI HIGH COURT
Heard Mr. K. Lollen, learned counsel for the petitioner. Also heard Mr. U. Kato, learned DSGI, appearing for the respondent No. 1 and Mr. T. Kipa, learned standing counsel, CGST appearing for the respondent Nos. 2 & 3.
2. It is the case of the petitioner that he has been carrying out his proprietorship business under the name & style, “TOSD Enterprise”. He is an Assesee registered under the Central Goods and Services Tax(CGST) Act, 2017/ Arunachal Pradesh Goods and Services Tax(AGST) Act, 2017, bearing registration No. 12BRIPT2656K1ZG. On the reason of non-filing of GST returns for a continuous period of 6(six) months, the petitioner, herein, was served with a Show Cause Notice, bearing reference No. ZA1204250013655, dated 16-04-2025, asking him to furnish reply to the aforesaid Notice within a period of 30(thirty) days from the date of service of the Notice and it was mentioned in the aforesaid Notice that if the petitioner fails to furnish a reply within the stipulated date, or, fails to appear for personal hearing on the appointed date and time, the case will be decided ex-parte on the basis of the available records and on merits. Thereafter, the impugned order, dated 30-05-2025, was passed by the respondent No. 3, whereby the petitioner’s GST Registration has been cancelled for not furnishing returns for a continuous period of 6(six) or more months.
3. In the writ petition, the petitioner has contended that being non-conversant with the online procedure; he could not visit the GST portal and accordingly, could not submit any reply to the said Show Cause Notice, on time. It is further contended that when the petitioner faced obstruction in running his business, he made enquiries with his Tax Consultant and only, thereafter, had come to learn about the issuance of the notice dated 16-04-2025, however, by then, the time for filing reply and attending the hearing, was already over and order had also been uploaded in the portal.
4. The petitioner has further contended that he updated all his pending returns, upto the month of March, 2025, as allowed by the GST portal and while updating his returns, the petitioner had also discharged all his GST dues along with late fees and interest.
5. Thereafter, the petitioner tried to file the necessary application seeking revocation of the cancellation of his GST Registration, however, the same could not be filed as the time limit prescribed for filing of revocation application, had lapsed and a message was displayed on the screen “timeline of 270 days from the date of cancellation order provided to taxpayer to file application for revocation of cancellation is expired.”
6. Being aggrieved, the petitioner, herein, has approached this Court by filing the present writ petition.
7. Mr. Lollen, learned counsel for the petitioner, has submitted that the petitioner is ready and willing to comply with all the formalities required as per the proviso to sub-rule(4) of Rule 22 of the Central Goods and Services Tax Rules, 2017.
8. As per the provisions of Section 29(2)(c) of the Central Goods and Services Tax Rules, 2017; 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 Central Goods and Services Tax Rules, 2017, has laid down the procedure for cancellation of the registration. The said Rule, being relevant, is extracted hereinbelow:
“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 (2A) of Rule 21A) cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under subsection (5) of Section 29.
(4) Where the reply furnished under sub-rule (2) (or in response to the notice issued under sub-rule (2A) of Rule 21A) is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20: 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.”
9. It is discernible from a reading of the proviso to sub-rule(4) of Rule 22 of the of the Central Goods and Services Tax Rules, 2017, that if a person, who has been served with a show cause notice under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, 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 i.e. Form GST REG-20.
10. The learned counsel appearing for the parties have also referred to an order, dated 11-03-2025, passed in W.P.(C) No. 2244/2024, and order, dated 24-07-2025, passed in W.P.(C) No. 3572/2025 [Jinny Daimary Vs. State of Assam & Ors.]; wherein, the petitioners, therein, are similarly situated like the petitioner, herein.
11. Having regard to the fact that the GST Registration of the petitioner, herein, has been cancelled under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, for the reason that he did not submit returns for a period of 06 (six) months, or more, and the provisions contained in the proviso to sub-Rule (4) of Rule 22 of the of the Central Goods and Services Tax Rules, 2017, and cancellation of registration entailing serious civil consequences; this Court is of the considered view that in the event, the petitioner approaches 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 so empowered, has the authority and jurisdiction to drop the proceedings and pass an appropriate order in the prescribed Form.
12. In that view of the matter; this writ petition is hereby disposed of by providing that the petitioner, herein, shall approach the concerned authority within a period of 2(two) months from today seeking restoration of her GST registration. If the petitioner submits such an application and complies with all the requirements as provided in the proviso to sub-rule(4) of Rule 22 of the of the Central Goods and Services Tax Rules, 2017; the concerned authority shall consider the application of the petitioner, herein, for restoration of his GST Registration and pass necessary orders in accordance with law.
13. The entire process be completed expeditiously and preferably within an outer limit of 60(sixty) days from the date of receipt of a certified copy of this order.
14. It is needless to say that the period as stipulated under the provisions of Section 73(10) of the Central Goods and Services Tax Act/State Goods and Services Tax Act, shall be computed from the date of this order, except, for the financial year 2025-26, which shall be as per the provisions of Section 44 of the Central Goods and Services Tax Act/State Goods and Services Tax Act. The petitioner, herein, shall also be liable to make payment of arrears i.e. tax, penalty, interest and late fees.
15. With the above directions, the instant writ petition, accordingly, stands disposed of.
