M/S Apurba Enterprise And Anr vs. The State Of Assam And 8 Ors
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The petitioners, M/s Apurba Enterprise and its proprietor Shri Manu Ray, filed a writ petition challenging the cancellation of their GST registration by the Assistant Commissioner of State Taxes on December 7, 2019, under Section 29 of the CGST/AGST Act, 2017. The cancellation was based on the allegation of non-filing of returns for six continuous months. The petitioners claimed they lost contact with their tax consultant and were under the belief that compliances were being met. A show-cause notice was issued on November 7, 2019, and a reply was submitted by the consultant on November 15, 2019. However, the petitioners allege no further opportunity for hearing or clarification was provided before the cancellation order. They now express willingness to pay all pending liabilities and seek restoration of their registration, citing difficulties in executing government contracts without it.
Held
The Court held that the cancellation of GST registration entails serious civil consequences. It noted that Rule 22(4) of the CGST Rules, 2017, provides a mechanism where, if a person served with a show-cause notice for non-filing of returns is ready and willing to furnish all pending returns and make full payment of tax dues along with applicable interest and late fee, the officer can drop the proceedings. The Court found that the petitioners are willing to comply with these requirements. Therefore, the Court directed the respondent authorities to consider the case of the petitioners with empathy. Upon receipt of an application and all necessary documents from the petitioners seeking restoration of their GST registration, along with the furnishing of all pending returns and full payment of tax dues, interest, penalty, and late fee, the empowered officer shall consider the application and take necessary steps for restoration of the GST registration as expeditiously as possible. The Court clarified that the condonation of delay in this case would not be taken as a precedent.
Key Issues
1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST/AGST Act, 2017, for non-filing of returns for six months, was justified without affording adequate opportunity for hearing or clarification, particularly when the petitioner is willing to comply with pending liabilities? The petitioner argued that the cancellation order was passed without proper opportunity for hearing and that they are now willing to pay all pending tax dues, interest, and late fees. They relied on the proviso to Rule 22(4) of the CGST Rules, 2017, which allows for dropping proceedings if pending returns are furnished and dues are paid. They also cited the case of Mrs. Bobismrita Chetia Gogoi Vs. The Union of India and Others (WP(C) No. 956/2026) as precedent for restoration in similar circumstances. The respondent (Revenue) did not record any specific arguments in the judgment.
Sections Cited
Section 29, Rule 22
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Cause title — parties, addresses and appearances
ORDER Date : 25.03.2026
Heard Mr. D. J. Kapil, learned counsel appearing on behalf of the petitioners. Also heard Mr. B. Choudhury, learned Standing Counsel, representing the Finance and Taxation Department.
The instant writ petition has been filed by the petitioners, challenging the cancellation of GST registration of the petitioners, vide order dated 07.12.2019, passed under Section 29 of the CGST/AGST Act, 2017 and the consequential withholding of legitimate contractual dues of the petitioners by the respondent authorities.
The petitioner no. 1 is a sole proprietorship concern carrying on business under the name and style of “M/s Apurba Enterprise”, represented by it’s sole proprietor, the petitioner no. 2 herein. The petitioner no. 2 is a small-time contractor earning his livelihood by undertaking minor contractual and supply works under various departments of the Government of Assam from time to time and is an assessee under the provisions of the Central Goods and Services Tax Act, 2017 and the Assam Goods and Services Tax Act, 2017. 4. The petitioners’ case is that after obtaining GST registration in the year 2019, the petitioner no. 2 engaged the services of a Tax Consultant for the purpose of ensuring timely filing of statutory returns and payment of Goods and Services Tax in respect of the proprietorship concern, namely, M/s Apurba Enterprises. Pursuant
Page No.# 4/8 thereto, GST liabilities were duly discharged and returns were filed for the initial period following the registration of the proprietorship concern. However, thereafter, the petitioner no. 2 lost contact with the said Tax Consultant and was under the bona fide belief that necessary statutory compliances were being attended to. However, on 07.11.2019, a show-cause notice in Form GST REG-17 was issued proposing cancellation of the GST registration of the petitioners on the allegation of non-filing of returns for a continuous period of six months. After receipt of the show-cause notice, the Tax Consultant engaged by the petitioner submitted a reply on 15.11.2019. However, without affording any further opportunity of hearing or permitting submission of detailed clarification, the respondent authority proceeded to pass the impugned order ZA181219010115X dated 07.12.2019, cancelling the GST registration of the petitioners. The petitioners’ case is that due to the anti-CAA protest in Assam and Covid-19 pandemic as well as various other unavoidable circumstances prevailing at that point of time, the petitioners could not take effective steps to contest the proposed action for cancellation of registration by the respondent authorities.
It is contended that due to certain miscommunications with the Tax Consultant and not really understanding the effect of the show-cause notice as well as the cancellation of the GST registration, the petitioners could not effectively contest the aforesaid show-cause notice at that time and therefore, the GST registration has been cancelled. However, it is contended that at present, the petitioners are ready and very much willing to pay all the liabilities which are pending due against the petitioners. However, since there is a delay in approaching the respondent authorities, the petitioner have approached this Hon’ble Court for proper relief.
The learned counsel appearing for the petitioners submits that in the meantime, the petitioners have executed certain work with the Government and Page No.# 5/8 due to non-availability of the GST registration, the petitioner no. 2 is facing lot of problems. He submits that the petitioners are ready and willing to comply with the formalities required as per proviso to sub-rule (4) of Rule 22 of CGST, 2017. He further submits that in similar cases, this Hon’ble High Court has already passed (WP(C) No. 956/2026), decided on 20.02.2026. 7. It is seen that as per Section 29(2)(c) of the Act of 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 CGST Rules, 2017, has laid down the procedure for cancellation of the registration and the same being relevant is quoted 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 (2A) of Rule 21A) cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing
Page No.# 6/8 him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (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.”
Rule 22(4) of 2017, makes it clear 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, late fee, the officer, duly empowered, can drop the proceedings and pass an order in the prescribed Form, i.e., Form GST REG-20. It is also seen from the aforementioned case relied by the petitioner that similar power is there with the concerned officer and the same can be resolved by adopting to Rule 22(4) of the Act of 2017. 9. Taking into account of the fact that the GST registration of the petitioner has been cancelled under Section 29(2)(c) of the Act, 2017, for the reason that the petitioners did not submit GST returns for the period of 6(six) months and more and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Act, 2017 and cancellation of registration entails serious civil consequences, this Court is of the considered view that in the event of the petitioners approach the Page No.# 7/8 officer, duly empowered, by furnishing all pending returns and making full payment of the tax dues, along with all applicable interest and late fee, the officer, duly empowered, to consider the case of the petitioners and to drop the proceeding and pass an appropriate order in the prescribed form. Therefore, in view of the aforesaid provision as well as the case of Mrs. Bobismrita Chetia Gogoi (supra), this Court is of the considered view that the petitioners’ case should be considered by the respondent authorities with due empathy and do the needful for restoration of his GST registration.
Accordingly, this instant writ petition is disposed of by directing the respondent authorities to consider the case of the petitioner on receipt of an application and all the documents from the petitioners seeking restoration of his GST registration within a period of 2(two) months.
It is also observed that if the petitioners submit such an application and complied with all the requirements as provided in proviso to Rule 22(4) of the Act, the concerned authority shall consider the application of the petitioner for restoration of his GST registration in accordance with law and shall take necessary steps for restoration of GST registration of the petitioners as expeditiously as possible.
It is also made clear that that the petitioners shall be liable to make payment of all the arrears, i.e., tax, penalty, interest and late fee.
Since there is a delay by the petitioners in approaching the Court, the condonation of the delay in the instant case, shall not be taken as a precedent.
In view of the aforesaid directions, the instant writ petition is disposed of.
Page No.# 8/8 JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.