Jonabar Baruah Alias Junabar Baruah vs. The Union Of INDIA And 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, can be considered for dropping proceedings if the petitioner complies with the proviso to Rule 22(4) of the CGST Rules, 2017. The Court reasoned that cancellation of registration entails serious civil consequences. Therefore, if the petitioner approaches the empowered officer within two months from the date of the order, furnishes all pending returns, and makes full payment of tax dues, interest, and late fees, the concerned authority has the authority and jurisdiction to consider the application for restoration and pass necessary orders in accordance with law. The Court directed that the process be completed expeditiously, preferably within 60 days from the receipt of the certified copy of the order. It was also clarified that the period stipulated under Section 73(10) of the CGST Act/SGST Act shall be computed from the date of the instant order, except for the financial year 2024-25. The petitioner is liable to pay all arrears.

Facts

The petitioner, Jonabar Baruah, operating M/S. Kaushik Enterprises, is registered under the CGST Act, 2017. His GST registration was cancelled by the Superintendent, Dibrugarh-II-Range, via an order dated 21.07.2020, due to non-filing of GST returns for six continuous months. A show cause notice dated 26.06.2020 was issued, requiring a reply within seven days, but the date for personal hearing was not notified. The petitioner claims he could not reply due to business losses and that by the time he could address the notice, the time for reply and hearing had passed. He subsequently updated all pending returns up to July 2020 and paid all dues, including late fees and interest. However, he could not file an application for revocation of cancellation 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 six months, can be dropped if the petitioner furnishes all pending returns and makes full payment of 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 he is ready and willing to comply with the requirements of the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017. He argues that cancellation of registration has serious civil consequences and that the proviso allows for dropping proceedings if pending returns are filed and dues are cleared. He also relies on a previous order in WP(C) No. 6366/2023 where a similarly situated petitioner was granted relief. Revenue's arguments: The respondent raises the issue of delay in the petitioner approaching the High Court, given that the registration was cancelled in 2020.