Darshana Baruah Chutia Alias Darshana Baruah vs. The Union Of INDIA And 2 Ors.

Held

The Court held that the cancellation of GST registration, which entails serious civil consequences, can be considered for dropping proceedings if the petitioner complies with the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. This proviso allows for dropping proceedings if a person, served with a show cause notice under Section 29(2)(c) of the CGST Act, 2017, furnishes all pending returns and makes full payment of tax dues, applicable interest, and late fees. The Court reasoned that the Superintendent, being the duly empowered officer, has the authority and jurisdiction to drop proceedings and pass an order in the prescribed Form GST REG-20 under these circumstances. The ratio decidendi is that the beneficial provision of the proviso to Rule 22(4) should be extended to the petitioner who is willing to rectify the non-compliance. The Court directed the petitioner to approach the concerned authority within two months for restoration of her GST registration, and if she complies with the requirements of the proviso to Rule 22(4), the authority shall consider her application for restoration in accordance with law and take necessary steps expeditiously. The period stipulated under Section 73(10) of the CGST/SGST Act shall be computed from the date of the judgment, 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, Darshana Baruah Chutia, proprietor of M/s Rajdhani Associate, had her GST registration cancelled by the Superintendent, Central Goods and Services Tax, Guwahati-C-1, via an order dated 22.04.2024. This cancellation was due to non-filing of GST returns for a continuous period of six months or more. She was initially served a show cause notice on 12.03.2024, requiring a reply within seven working days. The petitioner claims she is not conversant with online procedures and missed the deadline for reply and personal hearing. Subsequently, she was unable to file an application for revocation of cancellation due to the elapsed time limit. She is now before the High Court seeking relief.

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, can be dropped if the petitioner furnishes pending returns and pays tax dues, interest, and late fees, as per the proviso to Rule 22(4) of the CGST Rules, 2017? Petitioner's arguments: The petitioner contends that due to reasons beyond her control, she could not submit the required returns under Section 39(1) of the CGST Act, 2017. She is ready and willing to comply with the conditions stipulated in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, which allows for dropping proceedings if pending returns are filed and tax dues, along with interest and late fees, are paid. She relies on a similar order passed in W.P.(C) No. 6366/2023 [Sanjoy Nath vs. The Union of India and others]. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or state.