2024 (11) TMI 784 - HC - GST

Cancellation of GST registration due to non-furnishing of returns for a continuous period of 6 months - HELD THAT - It is discernible from a reading of the proviso to sub-rule 4 of Rule 22 of the CGST Rules 2017 that if a person who has been served with a show cause notice under Section 29 2 c of the CGST 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. Having regard to the fact that the GST registration of the petitioner has been canceled under Section 29 2 c of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 six months and more; the provisions contained in the proviso to sub-rule 4 of Rule 22 of the CGST Rules, 2017 and the orders passed by the coordinate benches of this Court as well as by this Court in similar matters whereby the matters have been disposed of with a direction to the respondent authorities to revoke the cancellation of registration upon due payment of all statutory dues payable by the petitioners, this Court is of the considered view that no purpose will be served by keeping this writ petition pending and the present writ petition can be disposed of in similar terms, as had been made in similar other writ petitions. The impugned order dated 09.12.2021 is hereby interfered with and set aside. The petitioner is directed to approach the concerned authority within a period of 1 one month from today, seeking revocation of cancellation and restoration of his GST registration - petition disposed off.

Summary

Issues:
1. Cancellation of GST registration due to non-furnishing of returns for a continuous period of 6 months.
2. Application for revocation of cancellation of GST registration.
3. Legal provisions under Section 29[2][c] of the CGST Act, 2017 and Rule 22 of the CGST Rules, 2017.
4. Court's intervention in similar cases of GST registration cancellation.

Detailed Analysis:

Issue 1: The petitioner, a proprietorship firm engaged in works contracts, had its GST registration cancelled for not filing returns for over 6 months. The cancellation was based on Section 29[2][c] of the GST Act, 2017, which allows cancellation in such cases.

Issue 2: The petitioner failed to file returns due to the impact of the Covid-19 pandemic on its business, leading to financial difficulties. Despite filing returns later, the revocation application period had lapsed, and the appeal period under Section 107 of the CGST Act had also expired. This prompted the petitioner to approach the court seeking relief.

Issue 3: The legal provisions under Rule 22 of the CGST Rules, 2017 outline the procedure for cancellation of registration and the conditions for revocation. The proviso to sub-rule [4] of Rule 22 allows for dropping proceedings if pending returns are furnished along with tax dues, interest, and late fees.

Issue 4: The petitioner's counsel cited previous cases where the court had ordered restoration of GST registration for similarly affected individuals. The Standing Counsel did not contest these instances, indicating a precedent for revoking cancellation in such cases. The court, considering the revenue implications and statutory obligations, directed the petitioner to seek revocation by paying outstanding dues within a specified timeframe.

In conclusion, the court set aside the cancellation order and directed the petitioner to approach the authority for revocation within a month, upon payment of outstanding dues. The judgment aligns with previous decisions and emphasizes compliance with statutory obligations under the GST regime.