Riaj Uddin vs. The Union Of INDIA And 2 Ors.

Held

The Court held that cancellation of GST registration entails serious civil consequences. Referring to Section 29(2)(c) of the CGST Act, 2017, and Rule 22(4) proviso of the CGST Rules, 2017, the Court found that if a person served with a show cause notice for non-furnishing of returns for six months is willing to furnish all pending returns and make full payment of tax dues, interest, and late fees, the empowered officer has the authority to drop the proceedings. The Court directed the petitioner to approach the concerned authority within two months seeking restoration of his GST registration. If the petitioner complies with all requirements as per the proviso to Sub-rule (4) of Rule 22, the authority shall consider the application and pass necessary orders expeditiously, preferably within 60 days from the receipt of the order. The Court also noted that the period under Section 73(10) of the CGST Act/SGST Act shall be computed from the date of this order, except for FY 2024-25 as per Section 44. The petitioner is liable to pay arrears of tax, penalty, interest, and late fees.

Facts

The petitioner, Riaj Uddin, operating as CBB Bricks Industry, is registered under the CGST Act, 2017. He was issued a show cause notice dated 17.12.2024 by the Superintendent, CGST Range, Morigaon-1, for non-filing of GST returns for six continuous months. The petitioner failed to reply within the stipulated period due to business losses. Subsequently, an order dated 16.07.2022 was passed by the Superintendent, CGST Range, Morigaon-1, cancelling his GST registration without assigning reasons. The petitioner later updated all pending returns up to December 2024 and paid dues, late fees, and interest. However, he could not file an application for revocation of cancellation as the time limit of 270 days from the cancellation order had expired. He then approached the High Court via a writ petition.

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 Sub-rule (4) of Rule 22 of the CGST Rules, 2017? Petitioner's arguments: The petitioner contended that due to business losses, he could not file returns or attend the hearing. He has since updated all pending returns and paid all dues, interest, and late fees. He is willing to comply with the requirements of the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017. He relied on a similar case, Sanjoy Nath vs. Union of India & Ors. (WP(C) No. 6366/2023). Revenue's arguments: The judgment does not record any specific arguments made by the respondents (Union of India and others).