Faizuddin Ahmed vs. The State Of Assam And Ors

As per the facts projected, the petitioner is a Contractor involved in contractual works with the Public Health Engineering Department, Assam and had obtained his GST Registration Certificate on 23.09.2017. He has been filing the returns till the year 2022-23. However, due to certain unavoidable circumstances, the returns could not be filed and accordingly on 22.05.2024, his GST Registration was cancelled under Section 29 (2)(c) of the GST Act, 2017. It is contended that there was slight delay on the part of the petitioner in filing GST returns for the year 2023-24. However, it is submitted that there is not dues of the petitioner.

It is contended that the petitioner is not conversant with the online procedure and though he had preferred an appeal, the same was dismissed vide order dated 30.01.2026. 4. Being aggrieved, the petitioner has approached this Court by filing the present writ petition.

Shri Talukdar, learned counsel for the petitioner has submitted that the petitioner is ready and willing to comply with all the formalities required as per proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. 8. As per Section 29(2)(c) of the Act, 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.

Shri Keyal, learned Senior Standing Counsel, CGST has however submitted that against the order of cancellation an appeal was preferred which was also dismissed however on the grounds of limitation and the statute provides for a further appeal under Section 112 of the CGST Act, 2017. The aforesaid submission is also endorsed by Shri H. Baruah, learned Standing Counsel, Finance (Taxation) Department.

Rule 22 of the CGST Rules, 2017 being the bone of contention, is extracted 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 Page No.# 4/6 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 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.”

It is discernible from a reading of the proviso to sub-rule (4) of Rule 22 of Page No.# 5/6 the Rules of 2017 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 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. 9. The learned counsel for the parties have also referred to an Order dated 11.10.2023 passed in a writ petition being WP(C) No.6366/2023 (Sanjoy Nath vs. The Union of India and others) wherein the petitioner therein was similarly situated like the present petitioner.

Having regard to the fact that the GST registration of the petitioner has been cancelled under Section 29(2)(c) of the Act, for the reason that the petitioner did not submit returns for a period of 6 (six) months and more and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences, this Court is of the considered view that interest of justice should be served if the matter is remanded back.

This Court has however taken into consideration that since the rejection by the Fist Appellate Authority is not on merits and in spite of the fact that there is a provision for preferring a further appeal, the matter be remanded back to the First Appellate Authority to take a decision on merits. In the event the petitioner makes such an approach by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, may consider to drop the proceedings and pass an Page No.# 6/6 appropriate order in the prescribed Form.

In such view of the matter, this writ petition is disposed of by providing that the petitioner shall approach the concerned authority within a period of 1 (one) month 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 Rules, the concerned authority shall consider the application of the petitioner for restoration of GST registration in accordance with law and shall take necessary steps for restoration of GST registration of the petitioner as expeditiously as possible.

It is needless to say that the period as stipulated under Section 73 (10) of the Central GST Act/State GST Act shall be computed from the date of the instant order, except for the financial year 2024 -25, which shall be as per Section 44 of the Central GST Act/State GST Act. The petitioner herein would also be liable to make payment of arrears i.e. tax, penalty, interest and late fees.

The writ petition accordingly stands disposed of. JUDGE Comparing Assistant