Chandra Sekhar Sarmah vs. The State Of Assam And 2 Ors.

Held

The Court held that given the serious civil consequences of GST registration cancellation and the fact that the petitioner's registration was cancelled under Section 29(2)(c) for non-filing of returns for six months, the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017, is applicable. This proviso allows for dropping proceedings if pending returns are filed and tax dues, along with applicable interest and late fees, are paid. The Court found that the petitioner has now complied with these conditions. Therefore, the Court directed the petitioner to approach the concerned authority within two months seeking restoration of his GST registration. If the petitioner complies with the requirements of the proviso to Sub-rule (4) of Rule 22, the authority is empowered to consider the application for restoration and pass necessary orders. The Court also clarified that the time limit under Section 73(10) of the CGST/SGST Act shall be computed from the date of this 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. This direction is a one-time measure for the petitioner's first default.

Facts

The petitioner, Chandra Sekhar Sarmah, a sole proprietor, is registered under the CGST/AGST Act, 2017. His GST registration was cancelled by the Assistant Commissioner of State Tax, Golaghat-1, via an order dated 15.06.2023, due to non-filing of GST returns for six continuous months. The petitioner was served a show cause notice on 15.01.2023, but could not reply within the stipulated 30 days because his business premises were under repair. By the time he became aware of the notice and the subsequent cancellation order, the time to file a reply and attend a hearing had passed. He subsequently updated all pending returns and paid dues, including late fees and interest, but could not file an application for revocation of cancellation as the 270-day time limit had expired.

Key Issues

1. Whether the petitioner is entitled to seek restoration of his GST registration despite the expiry of the statutory time limit for filing a revocation application, given that he has now filed all pending returns and paid all dues, including interest and late fees? Petitioner's contention: The petitioner argues that cancellation of GST registration has serious civil consequences. He relies on the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017, which allows for dropping proceedings if pending returns are furnished and tax dues, along with interest and late fees, are paid. He also refers to a similar case, Sanjoy Nath vs. Union of India & Ors. (WP(C) No. 6366/2023), where a similarly situated petitioner was granted relief. Revenue's contention: The judgment records instructions placed on record by the Finance & Taxation Department, but does not explicitly detail their arguments. However, the context implies they would rely on the statutory time limits for revocation.