Kipa Tapu vs. The Union Of INDIA And 4 Ors

Held

The Court held that the cancellation of GST registration, particularly for non-furnishing of returns for a continuous period of six months under Section 29(2)(c) of the CGST Act, 2017, carries serious civil consequences. The Court noted the provisions of the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, which permit the dropping of proceedings if a person, after being served with a show cause notice for contravention of Section 29(2)(b) or (c), furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fees. The Court also referred to previous High Court orders in similar situations. Therefore, the Court was of the view that if the petitioner approaches the empowered officer by furnishing all pending returns and making full payment of tax dues, interest, and late fees, the officer has the authority to drop the proceedings and pass an appropriate order. The Court directed the petitioner to approach the concerned authority within two months for restoration of his GST registration, and if he complies with the requirements of the proviso to Rule 22(4), the authority shall consider the application and pass necessary orders within 60 days. The period under Section 73(10) of the CGST/SGST Act will be computed from the date of this order, except for the financial year 2025-26.

Facts

The petitioner, Kipa Tapu, operates a proprietorship business under the name "TOSD Enterprise" and is registered under the CGST/AGST Act, 2017. He was issued a Show Cause Notice dated April 16, 2025, for non-filing of GST returns for six consecutive months. The notice stipulated a 30-day period for reply, failing which the case would be decided ex-parte. Subsequently, on May 30, 2025, the Jurisdiction Officer/Superintendent (Respondent No. 3) cancelled the petitioner's GST registration. The petitioner contended that he was unaware of the online procedures and therefore could not reply to the notice on time. He later updated all pending returns up to March 2025, paid dues, late fees, and interest. However, he could not file an application for revocation of cancellation as the 270-day time limit had expired.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-furnishing of returns for six months, can be revoked if the petitioner subsequently furnishes pending returns and pays dues, interest, and late fees, despite the expiry of the statutory time limit for revocation applications. The petitioner argued that due to his lack of familiarity with online procedures, he failed to respond to the Show Cause Notice promptly. He has since rectified all pending returns and paid all outstanding dues, including late fees and interest. He further contended that cancellation of registration has serious civil consequences and that the proviso to Rule 22(4) of the CGST Rules, 2017, allows for dropping proceedings if pending returns are filed and dues are paid. The petitioner also relied on previous High Court orders in similar cases (W.P.(C) No. 2244/2024 and W.P.(C) No. 3572/2025). The respondents, represented by the Union of India and the Principal Commissioner of CGST, did not present any arguments on the merits of the petitioner's case as recorded in the judgment.