Monojit Debnath vs. The Union Of INDIA And 3 Ors.

Held

The Court held that cancellation of GST registration carries serious civil consequences. Referring to Section 29(2)(c) of the CGST Act, 2017, and the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017, the Court noted that if a person served with a show cause notice for non-filing of returns furnishes all pending returns and makes full payment of tax dues, interest, and late fees, the empowered officer has the authority to drop the proceedings. The Court directed the petitioner to approach the concerned authority within two months from the date of the order seeking restoration of his GST registration. If the petitioner complies with all requirements as per the proviso to Sub-rule (4) of Rule 22, the authority shall consider the application and pass necessary orders expeditiously, preferably within 60 days from the receipt of the certified copy of the order. The Court also clarified that the period stipulated under Section 73(10) of the CGST/SGST Act shall be computed from the date of the instant order, except for the financial year 2024-25, which will be as per Section 44. The petitioner is liable to pay arrears of tax, penalty, interest, and late fees.

Facts

The petitioner, Monojit Debnath, a sole proprietor registered under the CGST Act, 2017, had his GST registration cancelled by the Superintendent, CGST Range, Morigaon-1/Guwahati-Range-II via an order dated 13.09.2024. This cancellation was due to non-filing of GST returns for a continuous period of six months, following a show cause notice dated 13.08.2024. The petitioner claims he could not reply to the notice due to illness. He subsequently updated all pending returns and paid dues, late fees, and interest. However, he was unable to file an application for revocation of cancellation as the 270-day timeline had expired. His appeal against the cancellation order was also rejected. Aggrieved, he filed a writ petition before the High Court.

Key Issues

1. Whether the petitioner can seek restoration of his GST registration despite the expiry of the statutory timeline for filing a revocation application, given the circumstances of his illness and subsequent compliance? The petitioner argued that due to illness, he could not respond to the show cause notice in time. He has since filed all pending returns and paid all dues, interest, and late fees. He contended that cancellation of registration entails serious civil consequences and that the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017, allows for dropping proceedings if pending returns are furnished and dues are paid. He relied on a previous order in WP(C) No. 6366/2023 (Sanjoy Nath vs. Union of India & Ors.) where a similarly situated petitioner was granted relief. The respondents, represented by the Dy.S.G.I. and SC, GST, did not record any specific arguments in the judgment.