Ratan Kumar Halder vs. The State Of Assam And 2 Ors

Held

The Court held that the cancellation of GST registration entails serious civil consequences. It noted that the petitioner's registration was cancelled under Section 29(2)(c) of the CGST Act, 2017, for non-filing of returns for six months. The Court found that the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, empowers the proper officer to drop proceedings if the registered person furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fees. Therefore, the Court was of the considered view that if the petitioner approaches the concerned authority and complies with these requirements, the authority has the jurisdiction to consider the application for restoration. The Court directed the petitioner to approach the concerned authority within two months for restoration, 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) will be computed from the date of this order, except for FY 2024-25. The petitioner remains liable for arrears.

Facts

The petitioner, Ratan Kumar Halder, proprietor of M/S R.K. Trading Co., is registered under the CGST/AGST Act, 2017. Due to losses from COVID-19, he failed to file GST returns for six months. Consequently, he received a show cause notice dated 30.06.2021 from the Assistant Commissioner of State Tax, Tinsukia, requiring a reply within seven days, but no personal hearing date was specified. Subsequently, an order dated 09.07.2021 was passed by the Assistant Commissioner, cancelling his GST registration without assigning reasons. The petitioner claims he updated all pending returns and paid dues, including late fees and interest, but could not file a revocation application due to the expiry of the 270-day time limit. He approached the High Court via a writ petition.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-filing of returns for six months, is valid when the petitioner has subsequently filed all pending returns and paid dues, and the proviso to Rule 22(4) of the CGST Rules, 2017, allows for dropping proceedings under such circumstances? Petitioner's arguments: The petitioner contends that due to COVID-19 impacts, he could not respond to the show cause notice in time. He has since rectified the non-compliance by filing all pending returns and clearing all tax dues, interest, and late fees. He relies on the proviso to Rule 22(4) of the CGST Rules, 2017, which permits dropping proceedings if pending returns are filed 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 any specific arguments made by the respondent revenue authorities.