Shri Pankaj Mohan vs. The Union Of INDIA

Held

The Court held that the cancellation of GST registration, particularly under Section 29(2)(c) of the CGST Act, 2017, for non-filing of returns for six months, entails serious civil consequences. Referencing a previous judgment in WP(C) No. 5944/2025 (Dhirghat Hardware Stores & Anr. Vs. Union of India & 3 Ors.) and other similar matters, the Court found that the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, provides a mechanism for dropping proceedings if the registered person furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fee. The Court reasoned that since the petitioner has updated his returns and is willing to clear all dues, the proceedings should be considered for dropping. The Court directed the petitioner to approach the concerned authority within 60 days with an application for restoration of his GST registration, accompanied by compliance with all requirements stipulated in the proviso to Rule 22(4). The concerned authority was directed to consider the application in accordance with law and expedite the restoration process. The period stipulated under Section 73(10) of the CGST Act/State GST Act was to be computed from the date of the order. The petitioner was also directed to pay all arrears, including tax, penalty, interest, and late fees.

Facts

The petitioner, Shri Pankaj Mohan, proprietor of M/S Mohan Electromech, challenged a communication dated 04.03.2025 by the Superintendent of GST, Naharkatia Range, cancelling his GST registration. The cancellation was due to non-filing of GST returns for six continuous months. The petitioner contended that he faced difficulties accessing the GST portal due to miscommunication with his tax consultant, and by the time he received the show cause notice, the period for reply and personal hearing had expired. He claimed to have updated his GST returns up to October-December 2024 and wished to continue his business. The respondents, represented by the Union of India and others, agreed to a similar relief as granted in a previous similar matter.

Key Issues

1. Whether the cancellation of the petitioner's GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-furnishing of returns for a continuous period of six months, is sustainable when the petitioner has subsequently furnished all pending returns and is willing to pay tax dues, interest, and late fees? The petitioner argued that the cancellation order is unsustainable because he has rectified the non-compliance by updating all pending returns and is desirous of continuing his business. He also submitted that the limitation period for filing a revocation application had elapsed, preventing him from formally seeking revocation. He 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. The revenue/State, through its counsel, fairly submitted that they would have no objection if similar relief, as granted in a prior identical matter, was extended to the petitioner. No specific arguments or reliance on provisions/precedents were recorded for the revenue/State beyond their agreement to the court's prior order.