Divisional Forest Officer, Kochugoan Division vs. The Union Of INDIA And 2 Ors.

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, carries serious civil consequences. The Court referred to the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017, which allows for dropping proceedings if the person furnishes all pending returns and makes full payment of tax dues, interest, and late fees. The Court found that the petitioner had updated pending returns and discharged their dues. Therefore, the Court directed that the petitioner should approach the concerned authority within two months from the date of the order seeking restoration of GST registration. If the petitioner complies with the requirements of the proviso to Sub-rule (4) of Rule 22, the authority should consider the application and pass necessary orders in accordance with law. The Court also noted 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. The issue of the time limit for filing revocation applications was implicitly addressed by allowing the petitioner to approach the authority for restoration.

Facts

The petitioner, Divisional Forest Officer, Kochugoan Division, registered under CGST/AGST Act, 2017, received a show cause notice dated 08.11.2022 for non-filing of GST returns for six continuous months. The notice required a reply within seven days, failing which the case would be decided ex-parte. Subsequently, an order dated 29.11.2022 was passed by the Superintendent, Central Goods & Services Tax, Kokrajhar Range-II, cancelling the petitioner's GST registration without assigning any reason. The petitioner failed to reply within the stipulated time due to inability to visit the GST portal. Upon realizing this, the petitioner updated all pending returns up to November 2022, discharged GST dues, late fees, and interest. However, an application for revocation of cancellation could not be filed as the 270-day time limit had expired.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-furnishing of returns for a continuous period of six months, can be dropped if the petitioner furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fee, as per the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017? Petitioner's contention: The petitioner argued that they are ready and willing to comply with all formalities required by the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017. They highlighted that the cancellation of registration entails serious civil consequences and that they have already updated pending returns and discharged their dues. Revenue's contention: The judgment does not record any specific arguments made by the revenue or state. However, the Superintendent passed the impugned order cancelling the registration.