Ankita Das Choudhury vs. The State Of Assam And 2 Ors

Held

The Court held that the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-furnishing of returns for six months, entails serious civil consequences. Referring to 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 under Section 29(2)(c) is willing to furnish all pending returns and make full payment of tax dues, along with applicable interest and late fees, the empowered officer has the authority to drop the proceedings. The Court found that the petitioner had updated her returns and paid dues. Therefore, the Court directed the petitioner to approach the concerned authority within two months for restoration of her GST registration, provided she complies with the requirements of the proviso to Sub-rule (4) of Rule 22. The authority was directed to consider the application and pass necessary orders expeditiously, within 60 days of receiving the order. The Court clarified that the time limit under Section 73(10) would be computed from the date of the order, except for the financial year 2024-25, and the petitioner would be liable for arrears. This direction was given considering it was a first-time default and not to be treated as a precedent.

Facts

The petitioner, Ankita Das Choudhury, operating as a proprietorship under "M/S Arian Entertainment," is registered under the CGST/AGST Act, 2017. Due to non-filing of GST returns for six months, she received a show cause notice dated 11.10.2023 from the Assistant Commissioner of State Tax, Guwahati-B-2. The petitioner failed to reply within the stipulated period, citing unfamiliarity with online procedures. Consequently, an order dated 21.11.2023 was passed by the Assistant Commissioner, cancelling her GST registration without assigning any reason. The petitioner subsequently updated all pending returns and paid dues, including late fees and interest. However, she could not file an application for revocation of cancellation as the 270-day time limit had expired.

Key Issues

1. Whether the cancellation of the petitioner's GST registration, based on non-furnishing of returns for six months, was justified given the petitioner's subsequent compliance and the provisions of the CGST Rules, 2017? The petitioner argued that she was not conversant with online procedures and therefore could not file a timely reply to the show cause notice. She contended that she has since updated all pending returns and discharged all GST dues, including late fees and interest. She further argued that the 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. The revenue, represented by the Finance & Taxation Department, did not explicitly present arguments in the judgment but was represented by counsel.