The Gauhati High Court has clarified that an assessee whose GST registration was cancelled for non-filing of returns under Section 29(2)(c) of the CGST Act, 2017, may have such cancellation set aside if all pending returns are filed and dues paid as per the proviso to Rule 22(4) of the CGST Rules, 2017. This ruling affirms and applies existing precedent, providing binding authority for restoration of registration in similar circumstances within the jurisdiction.
Summary
| Category | Data |
|---|---|
| Case Name | WP(C)/5944/2025 of DHIRGHAT HARDWARE STORES AND ANR Vs THE UNION OF INDIA AND 3 ORS |
| CNR | GAHC010230992025 |
| Date of Registration | 15-10-2025 |
| Decision Date | 17-10-2025 |
| Disposal Nature | Disposed Of |
| Judgment Author | HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI |
| Court | Gauhati High Court |
| Bench | Single Bench |
| Precedent Value | Binding within Gauhati High Court’s jurisdiction |
| Overrules / Affirms | Affirms prior court orders, specifically refers to WP(C) No.6366/2023 (Sanjoy Nath vs. Union of India and others) |
| Type of Law | Tax Law (GST Act and Rules) |
| Questions of Law | Whether a GST registration cancelled for non-filing of returns may be restored upon subsequent payment of dues and compliance with Rule 22(4) of the CGST Rules, 2017. |
| Ratio Decidendi | If a taxpayer whose registration was cancelled under Section 29(2)(c) for non-filing of returns subsequently complies by filing all pending returns and paying applicable dues (including tax, interest, and late fee), then under the proviso to Rule 22(4) of the CGST Rules, 2017, the proper officer must consider dropping cancellation proceedings and restore the registration via Form GST REG-20. The decision to restore is to be made subject to such compliance and upon the taxpayer’s application within the specified period directed in the judgment. |
| Judgments Relied Upon | WP(C) No.6366/2023 (Sanjoy Nath vs. The Union of India and others) |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Interpretation of Section 29(2)(c) and Rule 22(4) of the CGST Rules, 2017; precedent established by the Gauhati High Court in similarly situated cases. |
| Facts as Summarised by the Court | Petitioner’s GST registration was cancelled for non-filing of returns for six months. Petitioner subsequently filed pending returns and paid all dues, but missed the statutory timeline for seeking revocation of cancellation through the GST portal. Despite the appeal being dismissed, the petitioner approached the High Court, requesting restoration of registration pursuant to compliance with tax and filing obligations. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and GST authorities within the jurisdiction of the Gauhati High Court |
| Persuasive For | Other High Courts, GST adjudicating authorities outside Assam, Nagaland, Mizoram, Arunachal Pradesh |
| Follows | WP(C) No.6366/2023 (Sanjoy Nath vs. The Union of India and others) |
What’s New / What Lawyers Should Note
- Clarifies that GST registration cancellations for non-filing of returns may be set aside if the taxpayer subsequently files all pending returns and pays all dues in terms of the proviso to Rule 22(4) of the CGST Rules, 2017.
- The ruling confirms that authorities are to consider an application for restoration even if the statutory portal window has lapsed, provided compliance with the requirements of the proviso is made.
- Lawyers can rely on this decision to obtain restoration of GST registration for clients if all outstanding dues and filings are complied with, even after the lapse of the portal’s limitation period.
- The decision underscores the serious civil consequences of GST registration cancellation, which warrants a liberal view for restoration upon genuine compliance.
Summary of Legal Reasoning
- The court examined Section 29(2)(c) of the CGST Act, 2017, which permits cancellation of registration for failure to file returns for six months.
- Rule 22 of the CGST Rules, 2017, lays out the procedure for such cancellation, including service of a show cause notice and opportunity for reply.
- The proviso to Rule 22(4) allows for proceedings to be dropped if, instead of replying to the notice, the taxpayer files all pending returns and pays all applicable dues (tax, interest, and late fee).
- The court recognized the petitioner’s subsequent compliance with all GST filing and payment requirements, even though the portal’s 270-day window to apply for revocation had lapsed.
- Citing the earlier order in WP(C) No.6366/2023 (Sanjoy Nath), the court directed authorities to entertain the restoration request upon full compliance.
- The court highlighted that cancellation of GST registration has serious civil consequences, necessitating an equitable approach if the taxpayer remedies past default.
Arguments by the Parties
Petitioner:
- The petitioner is a sole proprietor whose GST registration was cancelled due to non-filing of returns for six months.
- Due to unfamiliarity with online procedures, the petitioner missed both filing a reply and appearing for the hearing.
- Upon learning about the cancellation, the petitioner immediately complied by filing all pending returns and paying all dues, including interest and late fee.
- The portal did not allow for revocation application as the limitation period had expired.
- Seeks restoration of GST registration, expressing willingness to comply with all requirements per the Rules.
Respondent:
- No specific counter-arguments recited; however, participated in the proceedings and did not contest the facts relating to cancellation or subsequent compliance.
- Relied on the statutory provisions and the prior decision in WP(C) No.6366/2023.
Factual Background
The petitioner’s GST registration was cancelled by the Superintendent, GST, Dhubri-1, for failure to file returns for a continuous period of six months. Although the petitioner was served with a show cause notice, due to lack of familiarity with online processes, no reply was filed within the stipulated time, and cancellation was ordered ex-parte. The petitioner subsequently filed all pending GST returns and paid all dues (including late fee and interest), but was unable to apply for revocation via the portal as the limitation period of 270 days had passed. An appeal was dismissed. The petitioner then invoked writ jurisdiction of the Gauhati High Court seeking restoration of registration.
Statutory Analysis
- Section 29(2)(c) of the CGST Act, 2017: Empowers authorities to cancel registration if returns are not filed for six months.
- Rule 22 of the CGST Rules, 2017: Prescribes the procedure, including issuance of show cause notice, opportunity to reply, and effecting cancellation.
- Proviso to Rule 22(4): If, in response to cancellation, the person files all pending returns and pays dues (tax, interest, late fee), the officer can drop proceedings and restore registration by passing an order in Form GST REG-20.
- Section 73(10) of CGST Act: Period of limitation for assessments, stipulated to recommence from the date of the order as per court direction, except for FY 2024-25 as governed by Section 44.
Procedural Innovations
- The judgment directed that the statutory period of limitation under Section 73(10) would restart from the date of the High Court’s order (except for FY 2024-25), thereby providing relief for compliance post-cancellation.
- Provided for restoration proceedings to be entertained outside the portal’s prescribed timeline, upon court directions.
Alert Indicators
- ✔ Precedent Followed