Sri Madhurjyajyoti Rabha vs. The State Of Assam And 2 Ors.

Held

The Court held that the cancellation of GST registration entails serious civil consequences. It observed that Section 29(2)(c) of the CGST Act, 2017, permits cancellation for non-filing of returns for six months, and Rule 22 of the CGST Rules, 2017, outlines the procedure. Crucially, the proviso to sub-rule (4) of Rule 22 allows for dropping proceedings if pending returns are filed and tax dues, along with interest and late fees, are paid. The Court found that the petitioner had subsequently complied with these conditions. Therefore, the Court directed the petitioner to approach the concerned authority within two months for restoration of his GST registration, providing that if he complies with the requirements of the proviso to sub-rule (4) of Rule 22, the authority shall consider the application and pass necessary orders. The Court also clarified that the period under Section 73(10) of the CGST/SGST Act would be computed from the date of the instant order, except for the financial year 2024-25. The petitioner remains liable to pay arrears.

Facts

The petitioner, Sri Madhurjyajyoti Rabha, proprietor of "G.S. Agro Products," is registered under the CGST/AGST Act, 2017. He received a show cause notice dated 07.10.2024 for non-filing of GST returns for six continuous months. The notice did not specify a date for personal hearing. Subsequently, an order dated 08.11.2024 was passed by the Assistant Commissioner of State Tax, cancelling the petitioner's GST registration without assigning any reason. The petitioner claims he was not conversant with GST portal functions, missed the reply deadline, and later updated all pending returns and paid dues. He was unable to file for revocation of cancellation due to the expiry of the 270-day time limit.

Key Issues

1. Whether the cancellation of GST registration without assigning any reason, despite the petitioner having subsequently filed pending returns and paid dues, is legally sustainable under Section 29(2)(c) of the CGST Act, 2017 and Rule 22 of the CGST Rules, 2017? Petitioner's arguments: The petitioner contends that the cancellation order is arbitrary as no reasons were provided. He argues that he has since rectified his non-compliance by filing all pending returns and discharging his tax liabilities, along with late fees and interest. He relies on the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, which allows for dropping proceedings if pending returns are furnished and dues are paid. He also refers to a similar case, Sanjoy Nath vs. Union of India & Ors., WP(C) No. 6366/2023. Revenue's arguments: The judgment does not record specific arguments from the revenue or state.