Vedanta Talukdar vs. The State Of Assam And Ors

Held

The Court held that the cancellation of GST registration entails serious civil consequences. Referring to Section 29(2)(c) of the CGST Act, 2017, and the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017, the Court found that if a person served with a show cause notice for non-filing 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 disposed of the writ petition by directing 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 of receiving the order. The period under Section 73(10) of the CGST/SGST Act will 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, Vedanta Talukdar, a sole proprietor registered under GST, had his registration cancelled by the Assistant Commissioner of State Tax, Guwahati-C-8, via an order dated 16.07.2022. This cancellation was based on a show cause notice dated 02.07.2022, citing non-filing of GST returns for a continuous period of six months. The petitioner contended that due to losses from Covid-19, he could not file his reply or attend the hearing in time. He subsequently updated all pending returns and paid dues, interest, and late fees. However, he was unable to file an application for revocation of cancellation as the prescribed time limit of 270 days had expired.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-filing 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? The petitioner argued that he is ready and willing to comply with the conditions stipulated in the proviso to Sub-rule (4) of Rule 22 of the CGST Rules, 2017, which allows for dropping of proceedings upon furnishing pending returns and making full payment of dues. The revenue or State did not record any specific arguments against this contention, but the court considered the implications of the relevant statutory provisions.